Italy GDP Q3 2022


Italy: Economic growth decelerates but beats expectations in the third quarter

November 2, 2022

According to a preliminary estimate, GDP expanded 0.5% in Q3 in quarter-on-quarter seasonally adjusted terms, down from the 1.1% expansion recorded in the second quarter but beating market expectations.

On an annual basis, economic growth waned notably to 2.6% in the third quarter, following the previous period's 4.9% expansion.

Looking at the breakdown of the quarter-on-quarter growth figure by expenditure, the statistical office said that domestic demand made a positive contribution to the final reading while net exports had a negative effect. In sectorial terms, the primary and secondary sectors contracted while the services sector expanded.

A more detailed breakdown will be available on 1 December.

ING’s Paolo Pizzoli commented on the outlook:

"We remain convinced that a GDP contraction is hard to avoid in 4Q22, opening a short-lived recession which looks set to end by Q2 2023. Confidence data headed further south in October, including in the tourism sector. Households are gloomier as disposable incomes are increasingly eroded by accelerating inflation and with a backdrop of slowly growing wages. The new government will likely prioritize a new wave of compensatory measures, but these will mostly refinance expiring ones and so limit damage rather than inducing a turnaround.”

FocusEconomics panelists project activity to expand 2.7% in 2023, which is unchanged from the previous month’s projection, and 1.3% in 2024.

Author: Massimo Bassetti, Senior Economist

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