Italy Q2 GDP jumps far above forecasts, boosting economic recovery hopes

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 Italy’s economy grew by 2.7% in the second quarter from the previous three months, preliminary data showed on Friday, a much larger jump than expected which boosts hopes for a firm economic rebound this year.

On a year-on-year basis, second quarter gross domestic product in the euro zone’s third largest economy was up 17.3%, national statistics bureau ISTAT said.

A Reuters survey of 30 analysts had forecast a 1.3% quarterly rise, up 15.6% from the year earlier, when the economy was hardest-hit by the coronavirus.

ISTAT also slightly revised up its first quarter data to show a 0.2% quarter-on-quarter rise, previously reported as 0.1%. The year-on-year rate was revised to -0.7% from -0.8% previously.

Looking ahead, Rome officially forecasts the economy to rebound by 4.5% this year after the record contraction of 8.9% in 2020 when activity was hobbled by lockdowns to try to contain COVID-19.

Recent data has been stronger than expected, however, and government officials have said growth of around 5% this year now looks likely provided there is no worsening of the virus situation.

Friday’s GDP data will strengthen optimism.

Mario Draghi’s government began easing restrictions in April and almost all curbs on business and internal movement have now been removed.

ISTAT said the second quarter saw an increase in both domestic demand and exports.

It gave no numerical breakdown of components with its preliminary estimate, but said industry and services had both contributed positively to growth, while agriculture had been broadly stable.

Photo: A dog cools off at a fountain in downtown Turin, Italy. EPA-EFE/ALESSANDRO DI MARCO

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