In 2016, activity grew by almost 1%, driven by domestic demand. Net exports kept on negatively contributing to the overall growth for the third year in a row. Gross fixed capital formation grew by about 3%, with spending on machinery and equipment increasing by almost 4%. Over the last three years, investment of non-financial corporations grew by EUR 11 bn, while the public component has further declined, from EUR 45 bn in 2011 to EUR 35 bn in 2016. Home prices increased in Q4 2016. Even if it was a limited increase, it is the first positive figure in five years. The news flow keeps on being positive. According to the Agenzia delle Entrate, more than 528,000 residential units were sold in 2016, almost 20% more than in 2015.
A domestic driven recovery
In 2016, real GDP rose by almost 1%, driven by the strengthening of domestic demand, which, excluding the inventory change, added 1.4 percentage points to the activity growth. For the third year in a row, net exports’ contribution was negative (-0.1 points), as imports rose more than exports, respectively +2.9% and +2.4%. Despite the recovery, real GDP is still 7 percentage points below the pre-crisis level.
In 2016, the economy benefited from further improvement of conditions in the manufacturing sector, with production increasing by almost 2%, i.e. more rapidly than in France and Germany. While in 2015 the increase in the industrial activity had been extremely concentrated, with production of transport equipment rising by more than 15% and explaining most of the overall increase, in 2016 the positive momentum spread among several sectors. Production of metals and metal products increased by 3.3% and that of machinery and equipment by 3.6%, as fiscal incentives supported private investment, while the increase in the sector of food products and in that of pharmaceutical products mainly reflected the strength of exports, which rose by 4.2% and 6.8% respectively.
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by Paolo CIOCCA , Simona COSTAGLI