Italy: GDP records largest drop in more than two years
February 15, 2012
In the fourth quarter, GDP plunged a seasonally and working-day adjusted 0.7% over the previous quarter, according to the first estimate released by the National Statistics Office (ISTAT) on 15 February. The reading marked a further deterioration compared to the 0.2% contraction recorded in the previous quarter and was worse than market expectations of a 0.5% drop. In addition, the Q4 reading marked the largest contraction since the first quarter of 2009. In annual terms, the economy dropped 0.5% over the same quarter the previous year, which contrasted the 0.3% increase recorded in the third quarter of 2011 and marked the first year-on-year contraction since Q4 2009. Meanwhile, according to annual figures published by ISTAT on 2 March, GDP grew 0.4% in the full year 2011, below both the revised 1.8% expansion (previously reported: +1.4%) recorded in 2010 and government estimates of a 0.6% rise. According to the government, the economy is expected to contract 0.4% this year and to grow 0.3% in 2013. The Bank of Italy has a more pessimistic outlook and expects a 1.5% GDP contraction this year and flat growth in 2013.
Author: Armando Ciccarelli, Head of Data Solutions