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Italy Grows GDP

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Italy Grows GDP

The Italian National Institute for Statistics has just released final Gross Domestic Product (GDP) data for the country’s first quarter. Numbers remain little changed from the preliminary data received earlier and continue to show a reduction in the growth contraction scenario.

GDP growth year on year for Q1 of 2014 is reading at a negative 0.5%, this is exactly as anticipated by the market which was guided by the preliminaries, it does however represent a significant improvement over the 0.9% contraction experienced in the last quarter of 2013. Quarter on quarter this metric also hit expectations for a -0.1% fall, this however is down on the prior quarters minor 0.1% expansion.

Italy’s growth pick up is strongly backed up by an enhancement to the country’s fundamentals. Industrial Output data released this morning backs this up. The month on month figure for April, which is seasonally adjusted, is showing an expansion in the industrial sector of 0.7% on the month, this outpaces the previous reading which represented a contraction of -0.4%, it also clearly out performed market consensus estimates for an expansion of just 0.4% in the month of April. The more stable long term year on year indicator also easily beat all estimates, on a week day adjusted basis this number is now showing a healthy 1.6% expansion compared to the 0.1% contraction seen in March, consensus estimates predicted this at just 0.6% growth on the month.

Closer inspection of the good news in Italy’s Industrial Output expansion reveals it to be more of a mixed bag. The gains on the month were clearly led by a 3% pick up in energy output, this is not to be diminished but it tends to be a volatile sector so one positive growth reading should be discounted until a trend becomes evident.

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