Italy as yet slacking in Euro economy in spite of best six years

ROME (AFP) – Italy posted Wednesday its best annual economic growth figures since 2011 with its gross domestic product outdoing official forecasts to grow 1.5 percent on an annual basis.

Improved domestic demand for industrial products and in the service sector drove the improvement in the second quarter, national statistics body ISTAT said.

Analysts interpreted the pick-up as reflecting an upturn in business confidence that has been helped by receding concerns over the stability of the country s banking system.

But they warned that Europe s fourth biggest economy was still lagging behind its partners in the eurozone as it battles to repair the damage done by a lost decade of economic stagnation or recession.

The second quarter performance “makes it almost certain that GDP growth will exceed official projections of 1.1 percent for the whole year,” said Lorenzo Codogno, a former chief economist at the Italian finance ministry.

“Consensus expectations are catching up, but there remains a fair amount of scepticism on Italy s performance going forwards.”

In the first six months of 2017, growth was 1.2 percent, according to ISTAT.

In its first estimate of second quarter activity, the data body said the economy expanded by 0.4 percent from the first three months of the year.

That is significantly lower than the eurozone average of 0.6 percent quarter-on-quarter growth and 2.2 percent annual growth.