Italy's gross domestic product (GDP) has declined by 0.4 per cent in the second quarter (Q2) of this year compared to the previous quarter, though it rose by 0.3 per cent year-on-year. Carryover growth for 2023 is estimated at 0.7 per cent, according to the national account revision for Q2 2023 by Italian National Institute of Statistics (Istat).

On the supply side, the industrial production index in August registered a marginal 0.2 per cent increase compared to July. Over June-August, the index saw an average 0.4 per cent rise relative to the previous three months.

However, external trade figures for July show a decrease in both exports and imports, falling by 1.8 per cent and 4.7 per cent respectively. The decline was more significant for EU countries, with exports and imports dropping by 1.5 per cent and 6.3 per cent. Conversely, exports to non-EU27 countries surged by 8.8 per cent in August, while imports plummeted by 32.7 per cent year-on-year, Istat said in its September monthly report.

Labour market conditions appear generally favourable. In August, employment rose, driving the employment rate to 61.5 per cent, and unemployment fell to 7.3 per cent. Nonetheless, the volume of retail sales for the month dipped by 0.5 per cent.

The Italian consumer price index (NIC) increased 0.2 per cent month-on-month in September, with a 5.3 per cent year-on-year rise. The harmonised index of consumer prices (HICP) rose by 5.7 per cent on an annual basis, widening the inflation gap with the euro area.

Consumer and business surveys suggest that Italy's economy may continue to struggle in the coming months, with declining confidence indexes.

As for the international environment, uncertainties in inflation and global trade tensions, particularly in the Middle East, are likely to influence central bank decisions worldwide. Moreover, global merchandise trade volume fell by 0.6 per cent in July, led by China.

In comparison, the euro area saw a 0.1 per cent quarter-on-quarter GDP increase in Q2 2023, but other indicators like the Economic Sentiment Indicator (ESI) show a deteriorating perspective for the region.

Fibre2Fashion News Desk (KD)