In the second quarter of 2023, Italy’s Gross Domestic Product (GDP), adjusted for calendar effects and seasonality, decreased by 0.4% compared to the previous quarter but grew by 0.4% compared to the same quarter in 2022.
Initial estimates released on July 31, 2023, had predicted a quarterly decline of 0.3% and a year-on-year growth of 0.6%.
A key factor in this decline was the reduction in the number of working days during the second quarter of 2023, with three fewer working days compared to the previous quarter and one less compared to the second quarter of 2022.
The accumulated growth for 2023 stands at +0.7%.
In comparison to the previous quarter, all major domestic demand components saw decreases, with a 0.3% drop in national final consumption and a significant 1.8% decrease in gross fixed investments. Both imports and exports also decreased by 0.4%.
Domestic demand, excluding inventory changes, subtracted 0.7 percentage points from GDP variation: household consumption and Private Social Institutions (PSI) showed no contribution, while gross fixed investments contributed negatively by 0.4, and government spending by 0.3. On the other hand, inventory changes contributed positively by 0.3 percentage points, and net foreign demand had no effect.
The value-added in all major sectors – agriculture, industry, and services – saw negative trends, with decreases of 1.3%, 1.4%, and 0.1% respectively.
In summary, the comprehensive data on Italy’s quarterly economic performance confirms a 0.4% contraction in the second quarter of the year, slightly more pronounced than the preliminary estimate of 0.3%. Year-on-year growth in the second quarter stands at 0.4%, a decline compared to previous quarters and also revised downward from the preliminary estimate of 0.6%.
The main driver of the GDP contraction was domestic demand (including inventories), while foreign demand made no contribution. On the domestic front, private consumption had no impact, and both government spending and investments were negative. However, inventory changes contributed positively by 0.3 percentage points.
Additionally, working hours decreased by 0.5%, employment positions by 0.1%, and the labor force contracted by 0.3%. Per-capita incomes, however, increased by 0.8%.
This economic downturn in Italy during the second quarter reflects both domestic and international factors, and its impact on various economic sectors is evident in these figures.