ROME: Italy’s economy rebounded slightly more strongly than expected in the third quarter, supported by firm domestic demand, preliminary data showed on Tuesday. Gross domestic product rose 0.3 percent from the previous three months, national statistics institute ISTAT reported, following a stagnant second quarter. Year-on-year growth accelerated to 0.9 percent from a downwardly revised 0.7 percent in the second quarter.
A Reuters survey of 18 analysts had pointed to a 0.2 percent quarterly increase, up 0.8 percent year-on-year. The return to growth is welcome news for Prime Minister Matteo Renzi, who has staked his political future on a Dec. 4 referendum on his plans for constitutional reform, which opinion polls suggest he may lose.
ISTAT gave no numerical breakdown of components with its preliminary estimate, but it said quarterly growth was based on a “considerably positive” contribution from domestic demand, which more than offset a negative impact from trade flows. It added that industry and services activity had both expanded, while agriculture had contracted. Renzi’s government expects full-year growth in 2016 of 0.8, roughly in line with last year’s 0.7 percent rate, which would leave Italy in its customary position as one of the euro zone’s most sluggish economies.
In September, Rome cut its forecast for next year’s growth to 1.0 percent from 1.4 percent, still above the projections of most independent economists. ISTAT revised down year-on-year growth for the second quarter to 0.7 percent from a previously reported 0.8 percent, while making no change to the flat quarter-on-quarter reading.
