February 14, 2018 / 9:09 AM / a year ago

Italy fourth-quarter GDP rises 0.3 percent quarter-on-quarter, slightly below forecasts

ROME, Feb 14 (Reuters) - Italy’s economy grew slightly less than expected in the fourth quarter of last year, but over the whole year growth still posted its firmest rise since 2010, preliminary data showed on Wednesday.

Gross domestic product rose a quarterly 0.3 percent at the end of the year, following a 0.4 percent rise in the July-to-September period, and was up 1.6 percent on an annual basis, national statistics bureau ISTAT reported.

The quarter-on-quarter rise lagged an average forecast of a 0.4 percent increase in a Reuters survey of 29 analysts, while the 1.6 year-on-year increase was in line with the survey’s forecast.

ISTAT said fourth quarter growth was based on a rise in both exports and domestic demand.

It gave no numerical breakdown of components with its preliminary estimate, but said industry and services had both contributed to growth, while agriculture had contracted.

Over the whole of last year the economy grew 1.4 percent, ISTAT said, following 0.9 percent growth in 2016. After adjustments for the number of days worked, 2017 growth came in at 1.5 percent.

There were two fewer working days in 2017 than 2016.

The 2017 expansion was the strongest posted by Italy since 2010, but still left the country in its customary position as one of the most sluggish economies in the 19-nation currency bloc.

Average euro zone growth - not adjusted for workdays - came in at 2.5 percent in 2017, according to a preliminary estimate by Eurostat.

The official forecast of the government of Prime Minister Paolo Gentiloni was for Italian growth of 1.5 percent, not adjusted for the number of days worked.

ISTAT will issue official, full-year 2017 growth, calculated according to EU criteria, on March 1, together with 2017 public finance data.

Three days later Italy votes in a parliamentary election in which the ruling Democratic Party is expected to lose power.

Gentiloni’s government is forecasting the growth will remain steady at 1.5 percent this year.

The European Commission last week forecast Italy would grow 1.5 percent in 2018, putting it in last place in the euro zone and penultimate - above Britain - among the 28 European Union nations.

ISTAT made no revisions to third quarter growth of 0.4 percent quarter-on-quarter and 1.7 percent year-on-year.

So called “acquired growth” at the end of 2017 stood at 0.5 percent.

This means that even if GDP were to be flat quarter-on-quarter throughout this year, over the whole of 2018 it would still be up 0.5 percent from 2017.

Gavin Jones

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