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Macroeconomic outlook report: Italy

Fourth quarter of 2018

During the fourth quarter of 2018, Italy's GDP slowed by 0.53 p.p. in its year-over-year growth with respect to 3Q18, to a rate of 0.03% after lower growth in domestic demand. For its part, the year-over-year growth in the Industrial Production Index slowed by 0.06 p.p. to -0.13%. In the labor market, the unemployment rate increased when compared to the third quarter of 2018, standing at 10.58%, while the year-over-year rate of employment creation slowed by 0.25 p.p. to 0.61%. The euro depreciated against the dollar, recording an average exchange rate of 1.14 $/€. Finally, inflation decelerated to 1.42%.

Macroeconomic overview

  • During the fourth quarter of the year, the Italian economy slowed its year-over-year GDP growth rate by 0.53 p.p. to 0.03%. This behavior was mainly due to the deceleration of domestic demand, due to the decrease in the growth of public expenditure and gross fixed capital formation.
  • In the labor market, the unemployment rate rose by 0.31 p.p. from the previous quarter to 10.58%. The year-over-year growth rate of employment was 0.61%, decelerating by 0.25 p.p. from the previous quarter.
  • The euro depreciated against the US dollar by 0.02 dollars per euro in the fourth quarter of 2018 from the previous quarter, recording an average exchange rate of 1.14 $/€. This depreciation reflected expectations regarding the future relative orientations of the monetary policy of the Federal Reserve and the ECB, and the poor economic performance of Germany, Italy and France.
  • Inflation stood at 1.42% in the fourth quarter of 2018, slowing by 0.06 p.p. from the previous quarter, mainly due to lower growth in energy prices.

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© GMS Management Solutions, S.L., 2019. All rights reserved. The information contained on this publication is of a general nature and does not constitute a professional opinion or an advisory service. The data used in this publication come from public sources. GMS Management Solutions, SL assumes no liability for the veracity or accuracy of such data.