Paolo Pizzoli, Senior Economist at ING, notes that the revised estimate of 2Q18 Italian GDP data confirms the pace of growth has been weakening to 0.2% quarter on quarter from 0.3% in 1Q18.
Key Quotes
“The annual measure was down to 1.2% from 1.4% in 1Q18.”
“The interesting part is the detail of the demand breakdown, which is omitted at the preliminary estimate stage. We now know that domestic demand was the main driver of quarterly growth, driven surprisingly by strong private investments, which contributed 0.5% to quarterly growth on the back of strong machinery and plant and transport equipment components.”
“Inventories contributed another 0.2%, and national consumption added a meager 0.1%. As expected, net exports acted as a drag, subtracting 0.5% from growth, on the back of softening exports and sharply increasing imports.”
“All in all, while the demand breakdown shows comforting signs of an investment revival, lingering political uncertainty and softer export demand seem to be limiting the scope for any acceleration of Italian economic growth over 2H18. We confirm our forecast of average 1.1% GDP growth for 2018.”
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