THE FEDESPEDI quarterly economic outlook predicts turbulence for the Italian economy, still fragile and in the midst of facing a not exactly reassuring global outlook, with tariffs, sanctions, and higher prices for crude oil on the cards.
Added to these considerations by Fedespedi is a tug of war between the Italian government and the EU over Italy’s budget, based on differing assessments for the extent of future expansion of the country’s GDP. That wrangling will make any future predictions even more uncertain.
According to the Fedespedi Outlook, growth was weaker in the first few months of 2018, compared to what was experienced in 2017. In the first and second quarter of 2018 Italian GDP rose by 1.4% and 1.1%, respectively. What emerges, explains the Fedespedi report, “is lower dynamism in the Italian economy, following a good 2017 (+1.5%).”
Looking at the various components of GDP for the first quarter of 2018 (latest data available), one still notes some good growth in household consumption (+0.4% on the previous quarter), but also a 2.4% decline in fixed investments: “In effect,” the note goes on, “a certain slowdown in productivity seems to be underway, as evidenced by a 0.2% decline in industrial production in July compared to June. Over the entire January-July period, however, Italian industrial production increased by 2% over the same period of 2017 (data adjusted for calendar effect).”