Italy: GDP growth moderates slightly in Q3
October 29, 2021
According to a preliminary reading, GDP growth ticked down to 2.6% in quarter-on-quarter terms in the third quarter, from 2.7% in the second quarter. On an annual basis, economic growth came in at 3.8% in Q3, markedly down from the previous period's 17.0% increase, although this was partly due to a fading base effect.
Sequential data on production shows that the industrial and services sectors recovered, although output in the agricultural sector contracted. Meanwhile, on the expenditure side, both the domestic and external sectors contributed positively to the print.
A more detailed breakdown is expected to be released on 30 November.
On the outlook for Q4, Loredana Maria Federico, chief Italian economist at UniCredit, commented:
“After two consecutive quarters of buoyant growth, we expect to see a moderation in the pace of growth in Q4 2021. While we assume that the latest achievements in the vaccination campaign should prevent new severe restrictions in the coming months, growth in services activity is likely to slow given lower demand, as the reopening bump observed since late April peters out and outdoor social activities are reduced. A further slowdown in manufacturing activity is also projected towards the end of the year amid slowing global trade and supply-side constraints.”
Author: Frederico Teixeira de Abreu, Junior Economist