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.
Author: Dirina Mançellari, Senior Economist