Monthly report on Italian economy

Geopolitical turbulences, associated to uncertain evolution of trade agreements and the increased probability of hard Brexit, affected negatively the international outlook. In June, world merchandise trade decreased further.

In the second quarter of 2019, in Italy, the seasonally and calendar adjusted, chained volume measure of Gross Domestic Product (Gdp) was stable with respect to the previous quarter. This result synthetizes inventories negative contribution and domestic demand positive one. Net export provided a null contribution to GDP growth.

The slowing of economic activity affected also the labour market. After the growth observed in the previous months, in July the estimate of employed people decreased and the unemployment rate increased marginally.

Subsequently, the deceleration in the previous three months, in August the inflation marginally accelerated, with the core component displaying a larger increase than that in the headline index. The inflationary gap with the euro area reduced moderately.

In August, the consumer and business confidence worsened. The leading indicator, affected by the outlook negative evolution, decreased suggesting that the Italian business cycle will remain weak in the coming months.