Italy’s Economic Growth Registers Modest Increase in Q3 2023

Italy’s Gross Domestic Product (GDP) for the third quarter of 2023, expressed in chain-linked values with the reference year 2015, adjusted for calendar effects and seasonally adjusted, showed a modest growth of 0.1% compared to both the previous quarter and the third quarter of 2022.

As of October 31, 2023, the quarterly growth rate of GDP was reported as zero, both on a seasonally adjusted and year-on-year basis.

The third quarter of 2023 had three more working days than the previous quarter but one less working day compared to the third quarter of 2022.

The accumulated variation for 2023 stands at +0.7%, consistent with the estimate provided on October 31, 2023.

In comparison to the previous quarter, among the main components of domestic demand, national final consumption increased by 0.6%, while gross fixed capital formation decreased by 0.1%. Imports decreased by 2%, and exports increased by 0.6%.

The domestic demand net of inventories contributed +0.4 percentage points to GDP growth: +0.4 from household consumption and the consumption of Private Social Institutions (PSI), while the contribution from gross fixed capital formation and government expenditure was nil. The inventory variation contributed negatively to the GDP variation by 1.3 percentage points, while the contribution from net foreign demand was 1 percentage point.

Negative cyclical trends are observed in value-added in agriculture, forestry, and fishing (-1.2%), while positive trends are seen in both industry and services (+0.3% and +0.1%, respectively).

Key Insights:

  1. Revised Growth Figures:
    • The complete estimate of quarterly economic accounts reveals a 0.1% growth in GDP, both on a quarterly and year-on-year basis.
    • This marks an upward revision compared to the preliminary estimate in late October, where the growth rate was reported as zero on both a quarterly and year-on-year basis.
  2. Contributing Factors to Growth:
    • Positive contributions to the modest GDP growth come from household and PSI consumption, contributing 0.4 percentage points, and net foreign demand, contributing 1 percentage point.
    • The contribution from gross fixed capital formation and government expenditure is negligible, while inventory variation provides a negative contribution.
  3. Sectoral Performance:
    • The value-added of the industry increased by 0.3%, and services increased by 0.1%.
    • The primary sector (agriculture, forestry, and fishing) experienced a decline of 1.2%.
  4. Labor Market and Income Indicators:
    • Positive trends are noted in employment positions, work units, and hours worked, growing by 0.1%, 0.2%, and 0.4%, respectively.
    • Per-capita incomes have risen by 1.1%.

The economic outlook, with a slight GDP growth in the third quarter, reflects positive contributions from consumption and net exports, mitigated by a negative impact from inventory changes. Labor market indicators and per-capita incomes also show positive developments. The revised figures provide a more optimistic perspective compared to the earlier estimate.