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Italy Market Overview H1 2023

Raffaella Pinto • 01/08/2023
Despite initial expectations of recession at the beginning of the year, the Italian economy defied predictions and further expanded during the first half, GDP growth in June (Q2 23) posted a 1% increase Y/Y, and leading institutions have already upgraded year-end expectations (above 1%).
Labor market conditions remain favorable and preliminary May figures point out an increase in employment and a decline of unemployment rate standing at 7.6%. Inflationary pressure are easing with June estimates highlighting a further decrease with consumer index (NIC) standing at 6.4%, narrowing the gap with the euro area. The decline in the energy prices mainly affected the result while food prices (unprocessed food) are still a bit worrisome.
Gross households' disposable income increased by 3.2% in Q1 23 compared to the last quarter 2022 thanks to the inflation deceleration and saving rate increased in comparison to the previous three months.
Industrial production returned to growth in May (monthly base) after four consecutive declines. Although this improvement, the trend is still declining with an yearly contraction standing at 3.2%.

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