Italy: GDP growth gains momentum in Q2
September 1, 2022
Growth improved in the second quarter, with GDP increasing 1.1% quarter on quarter (preliminary estimate: 1.0%; Q1: +0.1%).
Household spending growth bounced back, growing 2.6% in Q2 compared to a 0.9% contraction in Q1. Public spending dropped at the sharpest pace since Q4 2020, contracting 1.1% (Q1: +0.3%). Meanwhile, fixed investment growth rose 1.7% in Q2, marking the worst reading since Q4 2020 (Q1: +3.6%).
On the external front, exports of goods and services increased 2.5% in the second quarter, which was below the first quarter's 4.7% expansion. In addition, imports of goods and services growth moderated to 3.3% in Q2 (Q1: +5.4% ).
On an annual basis, economic growth moderated to 4.7% in Q2, compared to the previous period's 6.3% growth.
As had been foreshadowed in the preliminary release, less stringent Covid-19 restrictions and higher tourist arrivals bolstered consumer demand, driving the improvement in Q2 growth. Less positively, export growth fell, likely depressed by expectations of slowing growth globally.
ING's Paolo Pizzoli commented on the figures:
"We believe that the second quarter's strong result will not continue and that a sharp slowdown will have started in 3Q22, before a recession begins in 4Q22. As far as the third quarter is concerned, we still expect that a GDP contraction might just be avoided. […] In the coming months, as the reopening effect evaporates, and with inflation set to remain close to current levels until year-end, we expect consumption to turn into a growth drag in 4Q22, causing a GDP contraction."