Italy: Economy keeps pace in Q1 2017
May 16, 2017
Italian GDP grew 0.2% over the previous quarter in Q1 in seasonally and working-day adjusted terms, according to an advance estimate released by the National Statistics Office (ISTAT) on 16 May. The result was in line with the 0.2% growth recorded in Q4 2016 and matched FocusEconomics’ forecast. According to the press release, the expansion in Q1 was the result of growth in both the agricultural and service sectors, while the industrial sector contracted. In annual terms, GDP grew 0.8% in Q1, down from Q4’s 1.0% expansion.
Industrial production has been muted so far in 2017, after a strong end to 2016. On the demand side, preliminary data indicate that domestic demand contributed positively to growth, more than offsetting a negative contribution from the external sector. More detailed national accounts will be released on 1 June.
This year the economy should broadly mirror last year’s performance. While the external sector should offer some additional support to growth thanks to strengthening global trade, private consumption is expected to weaken on the back of higher inflation, political uncertainty and a weak labor market.