Italy: Small positive GDP surprise increases odds of better reading for 2019 - ING

Commenting on today's Gross Domestic Product (GDP) report from Italy, "The small positive surprise in Italian GDP doesn't alter the picture of a quasi-stagnation," said ING analysts. "But this higher growth has nudged us to slightly revise up our average 2019 forecast to 0.2%."

Key quotes

"Looking ahead, we see limited scope for an acceleration in the short run. Scarce high-frequency evidence for 4Q19 points to confirmation of the current pattern. The decline in October consumer confidence might reflect softening employment data, already signalled by September preliminary labour market data."

"The widespread small rebound in business confidence, which affected industry, services and retailers, but not the construction sector, seems to suggest stabilisation rather than a turnaround. Interestingly, the survey details show some indications of inventory accumulation, possibly signalling that the worst is over in terms of de-stocking contribution to growth."

"Today’s small positive GDP surprise increases the odds of a better reading for 2019 overall. Assuming a flat fourth quarter we now expect average GDP growth for 2019 at 0.2% YoY."