ROME: Italy’s economic recovery unexpectedly ground to a halt in the second quarter, data released last week showed, dashing economists’ expectations of modest growth and dealing a blow to Prime Minister Matteo Renzi ahead of a crucial referendum on constitutional reform set for November.
Italy’s banking troubles, political uncertainty at home due to waning support for Mr Renzi, and mounting geopolitical risks — including the Brexit vote — all presumably played a role in the poor performance. Last Friday’s data, which showed flat output over the second quarter, also revealed that domestic demand provided a negative contribution to output while external demand made a positive contribution.
But what else do we know about what went wrong between April and June this year — and what are the implications for the rest of 2016 and beyond? Here is a deeper dive into other data for the second quarter, which helps make more sense of Italy’s economic struggles.
