ROME (Reuters) - Italy’s economy shrank 5.3% in the first quarter from the previous three months, national statistics bureau ISTAT said on Friday, the steepest drop in gross domestic product since the current series began in 1995.
ISTAT sharply cut its preliminary estimate of a 4.7% GDP fall issued last month, as the economy slumped due to a nationwide lockdown to try to curb one of the world’s worst outbreaks of the coronavirus.
On a year-on-year basis, first quarter GDP was revised down to show a 5.4% drop compared with the -4.8% printout in ISTAT’s flash estimate on April 30.
The fourth quarter of last year, before the coronavirus hit, was revised to -0.2% quarter-on-quarter from a previously reported -0.3%.
The breakdown of GDP components in the first quarter showed a plunge in domestic demand and a steep quarterly drop in both imports and exports.
Consumer spending fell 6.6% quarter-on-quarter, investments were down 8.1%, imports dropped 6.2% and exports fell by 8.0%.
Looking ahead, economists expect an even steeper GDP drop in the second quarter, which will include much more of the period covered by the coronavirus lockdown, before a partial rebound over the second half of the year.
Last month the government led by of the anti-establishment 5-Star Movement and the centre-left Democratic Party forecast a 10.5% quarter-on-quarter GDP drop in the second quarter.
Over the whole of this year, the European Commission has forecast the euro zone’s third largest economy will contract by 9.5%, which would take Italy’s inflation-adjusted GDP level back to where it stood in the late 1990s.
The Bank of Italy has forecast -9%, while the Rome government forecasts -8%.
ISTAT gave the following details on contributions to quarterly growth for the first quarter this year and the fourth quarter of last year.
Reporting by Gavin Jones, Rome Newsroom + 39 06 85 22 4350, firstname.lastname@example.org