October 31, 2019 / 12:25 PM / 13 days ago

Italy's economy grows 0.1% in third-quarter, just above forecast of stagnation

ROME (Reuters) - Italy’s economy eked out marginal growth of 0.1% in the third quarter from the second, supported by domestic demand, preliminary data showed on Thursday, continuing a long-running trend of virtual stagnation.

The rise in gross domestic product between July and September was the fourth consecutive quarter to post 0.1% quarter-on-quarter growth.

GDP rose 0.3% on an annual basis, national statistics bureau ISTAT reported, which was the strongest year-on-year rate since the third quarter of 2018.

The data beat an average forecast of a flat quarter-on-quarter reading, up 0.2% year-on-year in a Reuters survey of 28 analysts.

The euro zone’s third largest economy has been broadly stagnant since the first quarter of last year, maintaining its usual position among the most sluggish performers in the 19 nation currency bloc.

Quarter-on-quarter growth has now hovered between -0.1% and +0.1% for seven consecutive quarters since Q1 2018.

The government of the anti-establishment 5-Star Movement and the centre-left Democratic Party last month forecast full-year growth of 0.1% in 2019.

The stronger-than-expected third quarter data suggests that 0.2% may be a more probable full-year result.

So-called “acquired growth” at the end of the third quarter stood at 0.2%. This means that if GDP were to be flat quarter-on-quarter in the last quarter, over the whole of 2019 it would be up 0.2% from 2018.

ISTAT made no revision to the second quarter, when GDP rose 0.1% both quarter-on-quarter and year-on-year.

In the third quarter the economy was supported by an increase in domestic demand, ISTAT said, while trade flows were a drag on growth.

It gave no numerical breakdown of components with its preliminary estimate, but said industry and services had both shown slight growth, while agriculture had contracted.

Gavin Jones, +39 06 8522 4232, fax +39 06 854 0568; rome.newsroom@news.reuters.com

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