Italy Q2 GDP Growth Confirmed at Near 2-Year Low

The Italian economy grew by 0.2 percent on quarter in the three months to June 2018, in line with the preliminary reading and following a 0.3 percent expansion in the previous period. It was the weakest growth rate since the third quarter of 2016.
Joana Ferreira | 8/31/2018 10:33:04 AM
From the expenditure side, the largest contribution to growth was from gross fixed investment at 0.5 percentage points, followed by inventory changes at 0.2 percentage points. By contrast, net trade subtracted 0.5 percentage points to GDP growth while household consumption and government spending were neutral.

Gross fixed investment surged 2.9 percent in the second quarter, compared with a decrease of 1.1 percent in the precedent period, due to spending on transport equipment (9.2 percent vs 5 percent in Q1); plants, machinery and armaments (7.5 percent vs -2.4 percent); and residential construction (0.3 percent vs unchanged). Meanwhile, household consumption rose by 0.1 percent, easing from a 0.5 percent growth in the previous period, and government spending advanced 0.1 percent, the first increase in one year.

Net trade contributed negatively to growth as imports jumped by 1.8 percent (vs -1.8 percent in Q1) while exports fell by 0.2 percent (vs -2.2 percent in Q1).

From the production side, the services industries increased by 0.2 percent, easing from a 0.3 percent rise in the previous period. Positive growth was recorded within five of the seven sub-sectors of the services industries: trade, transport and accommodation (0.5 percent vs 0.8 percent in Q1); other service activities (0.5 percent vs 0.4 percent); real estate activities (0.3 percent, the same as in Q1); public administration, defense, education, health (0.2 percent vs 0.3 percent); and financial and insurance activities (0.1 percent vs -1.9 percent). By contrast, a contraction was recorded for both information and communication services (-1 percent vs -0.5 percent), and professional and support activities (-0.2 percent vs 0.7 percent). Industrial output increased by 0.3 percent (vs -0.2 percent in Q1), as manufacturing rose 0.3 percent (vs -0.2 percent in Q1) and construction output grew 0.2 percent (vs unchanged in Q1). Meanwhile, agriculture shrank by 1.4 percent, following a 4 percent jump in the first quarter.

Year-on-year, the economy grew by 1.2 percent in the second quarter, up from a preliminary reading of 1.1 percent and compared with an expansion of 1.4 percent in the previous three-month period. It was the slowest pace of expansion since the fourth quarter of 2016.

Italy Q2 GDP Growth Confirmed at Near 2-Year Low