New Delhi (Agency): Italy’s economy underperformed expectations in the second quarter of the year, according to data released by national statistics bureau ISTAT on Monday.
The country’s gross domestic product (GDP) dropped by 0.3% quarter-on-quarter, although it was up 0.6% compared to the same period a year ago.
The bleak data comes in contrast with Italian government forecasts of 1% growth for the entire 2023 and a modest expansion of the economy in the second quarter.
Meanwhile, economists polled by Reuters projected Italian GDP finishing the second quarter with a flat reading quarter-on-quarter and 0.9% annual growth.
“Italy is no longer outperforming its peers and we think it will experience a sharper drop in output than other euro-zone majors in the second half of 2023,” Franziska Palmas wrote in a report for Capital Economics seen by the news agency.
ISTAT gave no numerical sector breakdown of its preliminary second-quarter GDP reading, but said that industrial and agriculture output decreased whereas services grew marginally.
The bureau added that the 0.3% decline left the EU’s third biggest economy with so-called “carryover” growth of 0.8% in 2023, assuming flat growth in the remaining two quarters.
Earlier this month, the government said that GDP could grow by at least 1.2% this year, citing a positive trend in services buoyed by a prospering tourism sector, and that this would manage to counter-balance a slowdown in manufacturing.
According to ISTAT, annual inflation slowed to 6.4% in July from 6.7% in June, based on EU-harmonized consumer prices (HICP), while growth in prices of food, household and personal care stood at 10.4%, broadly in line with the month before and over 50% above the overall index.