Italy: Economy exits recession in Q4
March 11, 2014
In the fourth quarter, GDP expanded 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 11 March. The result contrasted the revised 0.1% drop seen in the third quarter (previously reported: 0.0% quarter-on-quarter). The expansion ended a streak of nine consecutive contractions in GDP-the longest recession in the country's history. On an annual basis, the economy contracted 0.9% in the final quarter, which was up from the 1.9% fall recorded in Q3 and marked the smallest drop since the last quarter of 2011. The quarterly improvement reflects better performance in the domestic and external sectors of the economy. Private consumption dropped 0.1% in Q4, which was up from the 0.2% drop in Q3. Fixed investment expanded 0.9%, which contrasted the 0.6% drop in Q3 and marked the strongest reading since Q1 2010. Exports of goods and services expanded 1.2% in Q4, marking an increase over the 0.5% rise recorded in the previous quarter. Simultaneously, imports rose 0.2% in Q4, which was down from the 0.9% expansion seen in the third quarter. As a result, the external sector's net contribution to overall growth swung from minus 0.1 percentage points in Q3 to plus 0.3 percentage points in Q4. 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 unchanged from last month's forecast. For 2015, panelists expect the economy to expand 1.0%.
Author: Armando Ciccarelli, Head of Data Solutions