Looking ahead to a decent Italian GDP report

Recent developments in the Italian economy indicate that activity remained unchanged at 0.3% qoq in Q3. The statistical tools put GDP growth at 0.3% qoq, in line with the increase posted in Q2. The improvement seems to have been broadly based. In fact, we already know from higher-frequency indicators that industry activity jumped by 0.4% qoq over the reference period, a touch below the Q2 increase (but a marked improvement from a year ago). 

The services sector's behaviour is more difficult to track because of the lack of published "hard" indicators. Still, the recent gyrations in the services headline PMI (53.3 on average in Q3, after 53.0 in Q2) are consistent with some stabilization in services sector activity (0.3% qoq). To summarize, the GDP report is likely to confirm that the recovery in Italy continued entering H2. 

"Going forward, we are looking for more of the same trend, with the impact of the drop in commodity prices, the various tax cuts promoted by the government, and the sustained recovery elsewhere continuing to be felt", notes Societe Generale.