Italy surprises with strong first-quarter growth

LUMINOSITY ITALIA

Long lagging in recovery from the 2008 global recession, Italy’s economy surged in the first quarter of the year, growing faster than the U.S. and the U.K., according to recent figures from the national statistics agency ISTAT.

The agency raised its estimate of growth in Italy to 0.4 percent compared with the previous quarter, up from 0.2 percent, and upward to 1.2 percent compared the first quarter of last year. The increase comes on the heels of an encouraging Italian jobs report for April, which showed unemployment dropping to 11.1 percent from 11.5 the previous month.

Though it is eurozone’s third-largest economy and the eighth-largest in the world, Italy has consistently trailed growth in the rest of the euro bloc in recent years as it took a big hit from the recession and financial crisis, compounded by its lack of competitiveness and low productivity.
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Italy’s recovery from the 2008 global economic crisis has trailed much of the developed world. With high unemployment fueling voter unrest, political uncertainty remains the biggest threat to its continued rebound.

ISTAT said the surprise revision on growth was due to a better-than-expected performance by the service sector. Italy’s estimated 1.2 percent GDP growth in the first quarter of the year is the highest since the fourth quarter of 2010.

The latest figures take Italy off the bottom of the European growth table. Germany tops the list with a 0.6 percent increase, followed by France and Italy at 0.4 percent. Italy still trails the eurozone average of 0.5 percent.

Former premier and Democratic Party leader Matteo Renzi said the figures “are the result of years of serious and rigorous work”.

“But I'm not satisfied because I know it's not enough,” said Renzi. “The only road is ahead, continuing to lower taxes, simplifying the system and encouraging the country’s real entrepreneurs.”

In other upbeat news, unemployment in Italy fell to 11.1 percent in April, the lowest level in almost five years, according to ISTAT. Jobless numbers were down 0.4 percentage points from March and 0.6 points lower than in April, 2016.

The number of employed in Italy in April rose by about 94,000, or 0.4 percent, compared to March. Employment rates increased for both men and women, with those over the age of 50 leading the rise, followed by those from 25 to 34 years old. Yet unemployment among the youth between the ages of 15 and 24 remained very high in April at 34 percent, unchanged from the previous month.