Situation Looks Bad in Italy, As GDP and CPI Remain Negative

The contraction in Italian Q2 GDP was revised higher today

Written by: Skerdian Meta • Monday, August 31, 2020 • 1 min read

• Last updated: Monday, August 31, 2020

The monthly GDP figures look a bit better in the report

The Italian economy was the weaknes one among major economies in the Eurozone in recent years and it fell in recession in Q3-Q4 of 2018. It started to recuperate in 2019, but then the coronavirus came and Italy was hit the hardest from the virus and the lock-downs that followed. The GDP took a deep dive, as the report below shows, while YoY CPI inflation remains negative at -0.5%.

Italian GDP Report Q2

Italy Q2 final GDP QoQ -12.8% vs -12.4% prelim
Q2 final GDP YoY -17.7% vs -17.3% prelim

Slightly negative revisions to initial estimates but it just reaffirms the worst quarterly contraction on record in the Italian economy during Q2, as the country is among the hardest hit by the pandemic in Europe.

Latest CPI Report Released by Istat – 31 August 2020

August preliminary CPI YoY -0.5% vs -0.5% expected
Prior CPI YoY -0.3%; revised to -0.4%
CPI MoM +0.3% vs +0.3% expected
Prior CPI MoM -0.1%; revised to -0.2%

HICP YoY -0.5% vs -0.3% expected
Prior HICP YoY +0.8%
HICP MoM -1.3% vs -1.1% expected
Prior HICP MoM -0.6%; revised to -0.7%

Italian headline annual inflation slumps to its weakest level since April 2016, as price pressures across the European region remains more subdued in August. This just reaffirms the narrative that the ECB will keep the stimulus tap flowing for an extended period of time.

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Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.