Country Economic Forecasts > Italy

In Q4, GDP increased by just 0.1% quarter-on-quarter, the slowest growth rate among the main Eurozone countries. However, the detailed breakdown of the national accounts paints a more positive picture. While de-stocking subtracted from growth, by 0.4% of GDP, all the other main components of demand made positive contributions to growth. Consumer spending was the main driver of growth, rising for the tenth consecutive quarter, while investment grew by 0.8%, slightly above expectations.The data so far this year have been mixed. Monthly surveys, such as the PMIs and the ISTAT confidence indicators, weakened in January and February. The February manufacturing PMI was the lowest in a year, but, at 52.5, was still consistent with reasonable growth. However, some official hard data have been more positive, with industrial production in January increasing by almost 2% on the month (albeit some of the rise may reflect a temporary weather-related boost).Overall, we see the economy expanding by 0.2% over the quarter in Q1. This, combined with average quarterly growth of around 0.4% during the rest of the year, would result in GDP growth of 1% for the year as a whole.