May 31, 2024 16:12 GMT
Consumption Contributes Positively To In Line Q/Q GDP Print
ITALY DATA
Italy quarterly Q1 GDP confirmed flash estimates at 0.3% Q/Q (vs 0.1% prior), while the annual figure was revised a tenth higher to 0.7% Y/Y (vs 0.7% prior).
- The details of the final release confirm that net exports were the largest contributor to GDP in Q1, adding 0.7pp to the quarterly growth rate.
- However, we note that inventories dragged down the domestic demand component by 0.7pp, offsetting the positive effect from net exports.
- That means that domestic demand ex-inventories contributed 0.3pp in total: Consumption 0.2pp, investment 0.1pp and government spending 0.0pp.
- The positive contribution of consumption comes despite weak developments in retail sales and consumer confidence through 2024. The resilient labour market, where the unemployment rate recently reached a new all-time low, likely supported consumption in Q1.
- Indeed, consumption printed above consensus expectations on an annual basis at 0.1% Y/Y (vs -0.2% cons). At present, analysts expect a -0.2% Y/Y development in Q2, but these estimates may be revised higher in time.
- Additionally, the 0.5% Q/Q growth in gross fixed capital investment was driven by a 1.7% Q/Q rise in construction investment (probably a function of the well-documented and controversial Superbonus scheme).
- We will return with an analysis of the GDP deflator and its components early next week.
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