ROME: Italian economy is likely to have underperformed significantly in the fourth quarter as compared to the rest of the euro area. According to a Societe Generale research report, the Italian economic growth is expected to have stayed at the same rate in the December as in the third quarter, at 0.25 percent quarter-on-quarter. This is in spite of the political backdrop and the banking sector woes seen in the quarter.
Meanwhile, the consumer sentiment and business sentiment indicators have rebounded in the fourth quarter. The PMI manufacturing index showed that the bulk of the increase is because of the new export order component. On the contrary, credit conditions have tightened for corporates, as observed in the bank lending survey, and employment growth has lost momentum, noted Societe Generale.
Both consumption and next exports are likely to have slightly contributed positively to the growth, whereas investment is expected to have provided a neutral one.