Wednesday, July 24, 2024

Italy narrowly misses entering technical recession

Italy has narrowly missed entering a technical recession in the third quarter (Q3) of this year, according to official data.

The Italian National Institute of Statistics (ISTAT) said its preliminary estimate for economic growth in the period between July and September was virtually unchanged compared to the previous three-month period, as well as compared to the same quarter in 2022, reports Xinhua news agency.

The Italian economy has now expanded in only one of the last four economic quarters.

However, it also avoided a technical recession, which is defined by contraction in several consecutive quarters.

The economy contracted by 0.4 per cent in the second quarter of this year, grew by 0.6 per cent in the first quarter, and shrank by 0.2 per cent in the final quarter of last year.

The data released on Tuesday is preliminary, and could see minor adjustments up or down.

Also on Tuesday, ISTAT said that its preliminary estimate showed the country’s annual inflation rate dropped dramatically to 1.8 per cent in October, down from a 5.3-per cent rate in September.

This is the lowest rate in Italy since July 2021.

Compared to September, prices decreased by 0.1 per cent in October.

The main factor pushing prices lower in October was a decrease in energy prices, ISTAT said.

October was the first month in the Italian government’s “anti-inflation quarter”, which will artificially reduce consumer prices on a basket of basic necessities over the final three months of the year. It is unclear how much of the reduced inflation rate is due to the new measure.

Inflation in the eurozone also fell, data released Tuesday by Eurostat showed, although the reduction was not as dramatic as in Italy.

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