From the expenditure side, the positive contribution to GDP growth came from inventory changes (0.4 percentage points) and final domestic demand (0.3 percentage points), namely consumer spending (0.3 percentage points) and government spending (0.1 percentage points). In contrast, net exports subtracted 0.2 percentage points from growth and fixed investment subtracted 0.1 percentage points.
Household expenditure grew 0.5 percent (0.1 percent in Q4 2016) and government spending rose 0.5 percent (0.6 percent in Q4). Meanwhile, net external demand contributed negatively as exports went up 0.7 percent (1.9 percent in Q4) while imports increased at a much faster 1.6 percent (2.3 percent in Q4). Gross fixed capital formation contracted by 0.8 percent (1.2 percent in Q4), dragged by lower investment in machinery and equipment (-2.2 percent from 0.3 percent in Q4) and transport equipment (-0.8 percent from 12.6 percent in Q4). Investment in construction rose 0.6 percent (0.4 percent in Q4).
From the production side, service sector grew 0.6 percent (0.3 percent in Q4); and agriculture rebounded 4.2 percent (-3.6 percent in Q4). By contrast industrial output shrank 0.3 percent percent (0.9 percent in Q4), as manufacturing fell 0.5 percent (0.9 percent in Q4) while construction expanded 0.5 percent (0.8 percent in Q4).
Compared with the same period of 2016, the economy expanded 1.2 percent, following a 1.1 percent growth in the previous period and above a preliminary reading of 0.8 percent.
The government of Prime Minister Paolo Gentiloni forecasts growth this year of 1.1 percent, up from 0.9 percent in 2016.