Italian Trade Balances Improve
The Italian National Institute of Statistics has just published the country’s March’s Trade Balance data. Global Trade is up significantly on the month at €3.873Bn compared with the February report of €2.629Bn, this has lead to a positive surprise in the market which had been expecting a trade contraction to around €2.470Bn. Italy’s Trade Balance within the EU however fell back slightly this month, at €1.173Bn this number is moderately down on the €1.260Bn February report.
Although the trade figures are holding up, the Italian economic recovery was dealt a blow yesterday as preliminary first quarter growth results showed an unanticipated fall back. GDP was reported as having slipped by 0.1% on the final quarter of last year and by 0.5% on the same period one year ago. Until this reversal in the growth trend, Italy had looked like it was on track to move out of recession. Italy’s government has forecast the economy to grow at 0.8% this year while the International Monetary Fund foresee a more moderate 0.6% growth. It is now likely that updated forecasts will scale back prospects for Italian GDP growth during 2014, by way of context the Italian economy contracted by 1.9% in 2013.
It is likely that the poor growth performance that has just come to light will assist Matteo Renzi’s government push through much needed structural reforms. There is a lot of resistance to these reforms particularly by the labour unions that are pushing for a much watered down version. The Renzi administration has been struggling to gain acceptance for it’s package of wide ranging economic proposals, it is hoped that yesterday’s economic update will encourage buy-in from the wider economy. Italian public debt is currently running at over 132% of Gross Domestic Product and fiscal rectitude is urgently needed in order to bring this back in line with EU requirements.
Sorry. No data so far.