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Italian growth edges up in second quarter

August 6, 2010

By Guy Dinmore in Rome

Published: August 6 2010 12:15 | Last updated: August 6 2010 12:15

Italy’s economy is continuing to emerge slowly from its worst post-war recession as figures released on Friday showed that GDP grew 0.4 per cent in the quarter to June, from the first three months of 2010.

Istat, the official statistics agency, said second-quarter GDP was up 1.1 per cent year on year, in line with forecasts. The centre-right government forecasts 1.1 per cent growth for 2010. First-quarter GDP also grew by 0.4 per cent.

Italy is the first major eurozone economy to release second-quarter figures, and its results indicate that a broader recovery is continuing. Economists said Italy, with a large export sector, is benefiting from the faster recovery in Germany, one of its main markets.

Economists said consumer demand remained weak in Italy but companies were rebuilding inventories. Istat said industrial production in June was 0.6 per cent up on May and 8.1 per cent ahead of a year ago. It did not give a complete breakdown of GDP in its preliminary report.

Some economists have expressed concern that the €25bn austerity package approved by parliament last month, covering 2011 and 2012, will damp GDP growth. The government denies this and says it is committed to cutting back its budget deficit, which a spokesman said on Tuesday would fall to 4.6 per cent of GDP by the end of 2010.

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