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A welcome dose of good news for the Italian economy.
Annual industrial production in the eurozone’s third largest economy accelerated at its best pace since 2010, raising hopes of an uptick in economic growth for a country beset by a host of political and banking woes in recent months.
Overall output rose 1.6 per cent in 2016 – the best annual performance in six years. Industrial production accounts for just under a third of Italian GDP.
On a working day adjusted measure, year on year factory output surged by 6.6 per cent in December on an annual basis – also its best performance since the summer of the eurozone’s debt crisis (see chart below).
The Italian economy has been stuck in a low growth trap for more than two decades. It is the only one of the eurozone’s 19 member states to have seen its GDP per capita shrink since the introduction of the single currency in 1998.
Economists at Barclays revised up their fourth quarter Italian GDP forecasts to 0.3 per cent from an earlier estimate of 0.2 per cent – figures which should help push annual GDP expansion to 1 per cent.
On the quarter, production was up 1.3 per cent in the final three months of 2016 compared to 2015 with a 1.4 per cent monthly climb also defying a broader slowdown seen in France and Germany in December and raising hopes of an uptick in Italian growth and the end of last year.
Chart via Bloomberg