GDP growth in Q2 grinds to a halt

Pier Carlo Padoan, Italian Minister for Economic Affairs

 ROME -- According to preliminary data released by Italy’s National Statistics Institute (ISTAT) on Friday, the country’s gross domestic product (GDP) was flat in the second quarter of the year in comparison with the first three months of 2016. ISTAT had initially predicted a slowing down in GDP growth, but a total halt was not expected.

 The Minister for Economic Affairs, Pier Carlo Padoan, had estimated a still low +0.1 or +0.2 percent GDP rise with respect to the first quarter of 2016, but ISTAT’s preliminary data results are worse than Padoan feared, with the result of +0 percent growth.

 As Italian newspaper ‘Il Fatto Quotidiano’ reports, Italy’s “sharp slowdown” comes after a +0.3 percent growth in the first quarter of 2016.

 Although Italian GDP growth in the second quarter remained unchanged from the first, it has risen by +0.7 percent in comparison with the same period from 2015.

 The rest of the Eurozone has also slowed down in GDP growth but has not come to a complete standstill, with an advance of +0.3 percent in the second quarter compared to +0.6 percent in the first three months of the year.

 Germany saw a +0.4 percent rise in GDP growth in the second quarter of 2016, even though analysts had only predicted a +0.2 percent rise. The United Kingdom’s second quarter saw a +0.6 percent growth.

 “This confirms Italy’s long term economic difficulties and reduces the space for an expansive strategy,” said the Managing Director of Nomisma, Andrea Goldstein, in relation to the statistics released by ISTAT. “In an increasingly complicated international economic environment,” he continued to say, “Italy has made clear that it will be experiencing difficulties in the long term.”

 According to ‘Il Fatto Quotidiano’, Goldstein expressed particular concern about the decline in industry value, but appeared less worried about demand, where the contribution of the national component was only slightly negative.  

 The ISTAT statistics showed that Germany came out at the top for GDP growth in the second quarter, but Paris also came to a standstill like Rome.

 Zero growth in Italy and France is partly due to the effect of terrorist attacks on the countries’ economies, ‘Il Fatto Quotidiano’ points out.