ITALY

摘要

Preliminary Q2 GDP was flat in y-o-y and q-o-q terms, fuelling the prospect of a return to recession. Having mustered an expansion of +0.1% (q-o-q) in Q1 2019 -the only positive growth increase in the past five quarters -the latest setback has kept the GDP consensus forecast at zero, although the economy minister insisted that the government's +0.2% target can still be achieved. After a crucial contribution in Q1, Istat commented that net exports had a neutral impact in Q2, while domestic demand was similarly muted. Elsewhere, June's industrial output drop of-0.2% (m-o-m) implied further deterioration in the sector, resulting in a -0.7% (q-o-q) slide overall in Q2 after a temporary resurgence atthe beginning of 2019. A deep slump in Germany's manufacturing arm has increasingly spread disruption through Euro area supply chains. Faced with a softening GDP growth outlook, Deputy PM Matteo Salvini has maintained that fiscal impetus will be implemented to boostthe economy. Indeed, Salvini endorsed a no-confidence vote in the governing coalition earlier this month, amid growing tensions between his League Party and coalition partners the Five Star Movement. The Senate has rejected any immediate plans for such a vote, while opposition parties appear to favour a resolution that avoids a snap general election. Still, the unravelling political uncertainty could undermine budget preparations for 2020 (to be proposed by mid-October) and heighten the already-fragile economic outlook.