Uncertainty Increasing in Italian Economy, Istat Reports

Rome: Growth prospects are being hit by increasing uncertainty, Istat said on Thursday in its report on the Italian economy for May and June. “The uncertainty surrounding the international framework is increasing further,” the national statistics agency stated.

According to Ansa News Agency, the report highlights that frequent updates on U.S. trade policy and escalating geopolitical tensions in the Middle East are contributing to the uncertainty. Although international trade showed signs of recovery in May and June, growth prospects remain negative. The economic activity trend varies significantly across regions, with moderate growth in China, a decline in the United States, and a decrease in industrial production in the euro area.

In May, the seasonally adjusted industrial production index recorded a month-on-month decline of 0.7%. However, in the March-May quarter, the index rose by 0.6%. In June, business confidence increased for the second consecutive month, whereas consumer confidence declined again after showing improvement in May.

The report also notes that in the first four months of the year, exports and imports of goods increased on a year-on-year basis in both EU and non-EU countries. The labor market remains solid, with the number of employed persons rising by 0.3% in May compared to the previous month. Growth was observed among both permanent employees and self-employed workers, while it declined among temporary employees.

Household spending on final consumption increased on a quarterly basis in the first quarter, alongside an increase in gross disposable income and in the saving rate of consumer households, which rose by 0.6 percentage points. The Harmonised Index of Consumer Prices (HICP) recorded a year-on-year increase of 1.7% in June, unchanged from May and two-tenths of a percentage point lower than that of the euro area. Inflation for the shopping basket, which includes food products and goods for household and personal care, accelerated, rising by 3.1% in June compared to 2.7% in May.