Italy GDP Q4 2016


Italy: Economy decelerates slightly in Q4

February 15, 2017

Italian GDP grew 0.2% over the previous quarter in Q4 in seasonally- and working-day adjusted terms, according to an advance estimate released by the National Statistics Office (ISTAT) on 14 February. The result came in slightly below the 0.3% growth recorded in Q3 and matched market expectations. According to the press release, the expansion in Q4 was the result of growth in both the industrial and the services sectors, while the agricultural sector moderated. In annual terms, GDP grew 1.1% in Q4, mirroring the reading observed in Q3—which had marked the highest result since Q2 2011.

The final quarter’s result brought full year 2016 GDP growth to 1.0%, the strongest reading in six years. The result was supported by strong gains in industrial production growth which accelerated to a six-year high of 1.6%. Domestic demand contributed positively to growth, while the external sector’s net contribution was negative. More detailed data on national accounts will be released on 3 March.

This year, a stronger performance from the external sector is expected to offset weaker domestic demand and fuel broadly steady, but lackluster, growth. Commenting on the outlook, Loredana Federico, Lead Italy Economist at Unicredit, adds:

“Preliminary indications for 1Q17 [show] positive signals coming from business surveys, mainly manufacturing surveys, while consumer and retail sentiment point to a loss of momentum. All in all, we expect the economic recovery to unfold in the first quarter at a pace close to the one recorded at the end of 2016.”

Against this backdrop, FocusEconomics Consensus Forecast panelists see the economy increasing 0.8% in 2017, which is unchanged from last month’s forecast. For 2018, panelists expect the economy to accelerate and expand 1.0%.

Author: Massimo Bassetti, Economist

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Italy GDP Chart

Italy GDP Q4 2016

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

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