Italian IP slow recovery trend stays intact

Italian industrial production rose slightly less than expected in September but its quarterly trend remains unabated, suggesting a modest recovery remains on track. IP rising +0.4% q/q in Q3, in line with Q4 14 - Q2 15 average, was also consistent with the expectation that real GDP expanded by +0.3% q/q in the same quarter (to be released on 13 November).

"We remain of the view that the economic recovery is likely to continue at similar pace, primarily led by domestic demand", notes Barclays.

Growth tailwinds which have been supporting the economy so far, including cheap oil prices, a weak euro, low interest rates, neutral fiscal policy stance and improving labour market conditions remain and could possibly strengthen should the ECB ease monetary policy further. GDP is expected to expand +0.8% this year and +1.4% in 2015 and 2016, respectively.