Italy GDP

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Italy: Economy contracts in Q1

June 10, 2014

In the first quarter, the economy contracted 0.1% on a seasonally- and working-day adjusted basis over the previous quarter, which was in line with the preliminary estimate released by the National Statistics Office (Istat) on 15 May. The result contrasted the 0.1% increase recorded in the fourth quarter. On an annual basis, the economy contracted 0.5% in Q1, which followed the 0.9% fall recorded in Q4.

The quarterly figure reflects a deterioration in both the domestic and external sectors of the economy. Fixed investment contracted 1.1% in Q1, which contrasted the 0.8% expansion tallied in Q4 and marked the strongest contraction in a year. Private consumption rose 0.1% in Q1, which was up from the flat reading tallied in Q4, while government spending added 0.4% (Q4:+ 0.2% quarter-on-quarter).

Exports of goods and services expanded 0.8% in Q1, marking a slowdown over the 1.2% rise recorded in the previous quarter. Simultaneously, imports rose 0.3%, which was slightly up from the 0.2% expansion seen in the fourth quarter. As a result, the external sector’s net contribution to overall growth fell from 0.3 percentage points in Q4 to 0.2 percentage points in Q1.

The Bank of Italy projects a 0.7% expansion in GDP in 2014 and a 1.5% expansion in 2015. Panelists see the economy growing 0.5% in 2014, which is down 0.1 percentage points from last month’s forecast. For 2015, panelists expect the economy to expand 1.1%.


Author:, Senior Economist

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Italy GDP Chart


Italy GDP Q1 2014

Note: Quarter-on-quarter changes of seasonally-adjusted GDP and year-on-year variation in %.
Source: National Statistical Institute (Istat) and FocusEconomics Consensus Forecast.


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