In an unexpected turn of events, Italy’s GDP has surged since the beginning of 2023, reversing a fall of 0.1% in the fourth quarter of last year following the election of right-wing Prime Minister, Giorgia Meloni, Italian National Institute of Statistics (Istat) data show.
“The Italian GDP continues to rise more than in France and Germany. This data from Istat is encouraging, and it tells us something very clear: The Meloni government is working well for the growth of the country, denying the lefties predictions of ill omen,” said Elisabetta Gardini, an MP with the Brothers of Italy party led by Meloni.
The figure was particularly surprising, revealing Italian GDP has risen in the first quarter by 0.6 per cent, more than that of the United States at 0.3 per cent, France’s 0.2 per cent and a fall of 0.3 per cent in Germany.
Italy’s GDP since January 2022 has increased by 1.9 per cent, topping the 1.6 per cent of the US, 0.8 per cent in France and a decrease of 0.2 per cent in Germany. Overall, the GDP of eurozone countries rose by 0.1 per cent over the preceding three months, and by 1.3 per cent since the first quarter of 2022.
The rise in GDP in Italy is in large part due to an upturn in domestic demand, which accounts for 0.7 per cent of national consumption, in gross fixed capital formations and public expenditure. However, imports and exports have fallen by 1 per cent and 1.4 per cent, respectively, which negatively impacted overall GDP. The agriculture sector remained stagnant.
Given the data for first quarter of the year, if GDP continues to rise at the same rate over the next three trimesters, growth for the year would stand at 0.9 per cent. As of now, there has been an 0.1 per cent increase compared to April.
Credit rating agency Moody’s increased its forecast for Italian growth in 2023: the agency’s update to its Global Macro Outlook in 2023-2024 now sees GDP growing 0.8 per cent in 2023, compared to its 0.3 per cent forecast at the end of February.”We increased in a modest manner or predictions for Italy, and for France, in response to the lower energy prices and a better start of the new year,” Moody’s analysts said.
Mario Draghi’s outgoing Italian government had slashed the 2023 economic growth forecast of 0.6 per cent due to rocketing energy costs, but guaranteed strong revenues would still ensure an improvement in public finances.
Italy has been struggling to recover from the Covid-19 crisis, that had resulted in stagnant economic growth and high public debt.
Alessandra Bocchi is Associate Editor at Brussels Signal
