Italy Economy Real Time Data Charts

Edward Hugh is only able to update this blog from time to time, but he does run a lively Twitter account with plenty of Italy related comment. He also maintains a collection of constantly updated Italy economy charts together with short text updates on a Storify dedicated page Italy - Lost in Stagnation?

Wednesday, November 21, 2007

Italy GDP Q3 2007

Well, a positive surprise on the upside for a change, since Italian economic growth accelerated in the third quarter, powered by consumer spending on services and manufactured goods, according to the report recently released by ISTAT.

Gross domestic product rose 0.4 percent from the second quarter, when it grew 0.1 percent, and expanded 1.9 percent when compared with Q3 2006.

Where we go from here is really anyone's guess, but there must be strong downside risks. Claus Vistesen has quite a comprehensive summary of the Q3 eurozone situation here, and Morgan Stanley's Vladimir Pillonca is hardly optimistic:

The Italian – and global – growth outlook seems to be darkening every day, despite the expected bounce-back of growth in the third quarter. We forecast Italian growth to slow sharply next year, to just 1.2%Y, from 1.8%Y this year, and we don’t anticipate a recovery to gather traction until the second half of next year. Risks are skewed to the downside. The possibility of a growth recession next year – defined as two or more quarters of negative quarter-on-quarter growth – is not a remote one.

as he says:

Consumer spending looks set for a slowdown after an unsustainably strong first half of the year. After all, wages are barely rising once we account for inflation, and both tax pressure and interest rates have risen in the recent past. Forward-looking consumers are likely to react to a more uncertain future, by allowing their savings to rise and their consumption growth to fall.

Is he clairvoyant or something, since this is exactly what the ISAE survey is showing consumer expectations to be at this point (and Pillonca's piece was written before this data release).

I will try and find the time to do a more in-depth analysis of Italian GDP when the full results are published in early December.

Italy Consumer Confidence November 2007

Italian consumer confidence surprisingly rose to a six-month high in November. The Rome-based Isae Institute's index, which is based on a poll of 2,000 households, rose to 107.6, the highest level since May, from 107.3 last month. However if we look at the chart we will see that the index has hardly budged since September, and that we are still in comparatively low territory.

One surprising detail in this months report is that consumers are saying that they are more likely to save their money than spend it in the near future, possibly becuase they are anticipating an economic slowdown in Italy.

A sub-index measuring household confidence in the ability to save rose to 143 from 132, and another measuring the ability to put money away in the future rose to minus 76 from minus 86. On the other hand, consumers grew more negative about growth, with a gauge falling to minus 35 from minus 29.