Italy’s economy contracted by 0.4 percent in the second quarter (Q2) of this year, the country’s National Institute of Statistics (ISTAT) said on Friday, bringing the European Union’s (EU) third-largest economy to the brink of a technical recession.
The contraction was greater than what preliminary estimates suggested in July, and it means that the economy has now shrunk in two of the last three quarters.
Despite the weak economic growth rate, Italy’s economy was still 0.4 percent larger at mid-year than it was at the same point in 2022. Additionally, relatively strong growth in the first quarter of the year means that the overall growth rate over the first six months of the year was 0.7 percent.
If the economy contracts again in the July-to-September quarter it would mean Italy entering into a technical recession, which is defined by back-to-back quarters of negative economic growth.
Over the last three quarters, Italy’s economy contracted by 0.1 percent, grew by 0.6 percent and then shrank again by 0.4 percent in Q2 2023. These compares to the 20-member eurozone’s quarterly growth rates of negative 0.1 percent, zero percent and positive 0.3 percent, respectively.
The negative economic trends were felt across the economy, ISTAT said, with agriculture, industry and services all registering decreases by 1.3 percent, 1.4 percent and 0.1 percent, respectively.
In a statement, ISTAT said the Q2 growth figure was “primarily driven by lower domestic demand,” while the “contribution of private consumption was zero and that of the public sector and of investments was negative.”
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