Q1 GDP Exceeds Expectations, But Domestic Component A Negative Contributor

Italian Q1 flash GDP was stronger than expected alongside Spanish, Germany and French counterparts, printing at 0.3% Q/Q (vs 0.1% cons) and 0.6% Y/Y (vs 0.3% cons). The Q4 ’23 figures were revised to 0.1% Q/Q (vs 0.2% prior) and 0.7% Y/Y (vs 0.6% prior).

• The data also prints above the Bank of Italy’s “Ita-coin” Nowcasting model, which was tracking at 0.11% Q/Q in March.
• The marginally positive print comes following a degree of tension between soft and hard data through Q1. While the composite PMI was above 50 through January – March, hard data such as retail sales and industrial production have remained subdued.
• The press release from ISTAT contains relatively little information, but notes that the Q/Q growth was due to “an increase of value added in agriculture, forestry and fishing, in that of industry and in services”.
• Further, ISTAT notes that external demand contributed positively to the Q/Q print while domestic demand was a negative contributor. That was a common theme among peer Eurozone members' GDP reports this morning (eg Spain).

Source: Istat, Bank of Italy, BBG, MNI