Italy: Growth moderates in third quarter
December 10, 2010
In the third quarter, gross domestic product rose a seasonally and working day adjusted 0.3% quarter-on-quarter, inching up from the 0.2% expansion reported in the preliminary estimate of 12 November. The expansion came in below the 0.5% rise observed in the second quarter. On an annual basis, the economy expanded 1.1%, which was down from the 1.3% rise recorded in the previous quarter. The weaker quarterly result was mainly due to negative net exports. Domestic demand improved compared to the previous quarter, driven in particular by a positive shift in inventories. Private consumption rose 0.3%, up from the flat reading recorded in the second quarter while fixed investment grew only 0.9% quarter-on-quarter, down from the 2.0% expansion recorded in the previous three-month period. Meanwhile, the net contribution from the external sector to overall growth turned negative in the third quarter. Exports expanded 2.8%, up from the 2.4% rise recorded in the previous quarter, while imports grew 4.7%, contrasting the 0.1% drop recorded in the March-June period. As a result, the net contribution from the external sector to overall growth swung from 0.6 percentage points in the second quarter to minus 0.5 percentage points in the third. The Ministry of Economy and Finance sees the economy growing 1.2% this year and 1.3% in 2011, while the Central Bank is less optimistic and sees the economy expanding 1.0% both this year and next.
Author: Armando Ciccarelli, Head of Data Solutions