Italy’s economy re-entered a recession in the first quarter, preliminary data from the statistical office Istat showed on Friday.
Gross domestic product fell 0.4 percent quarter-on-quarter, but slower than the 1.8 percent decrease seen in the fourth quarter.
With the second consecutive contraction after a sharp growth in the third quarter of 2020, the economy slipped into a technical recession amid the restrictions related to the coronavirus pandemic.
As vaccination progress allows more easing of restrictions across Italy, GDP growth is expected to turn positive in the second quarter and accelerate after that when the impact of inflowing EU Recovery funds will also come into play, Paolo Pizzoli, an ING economist, said.
On a yearly basis, the decline in GDP slowed to 1.4 percent in the fourth quarter from 6.6 percent in the preceding quarter.
The carry-over annual GDP growth for 2021was equal to +1.9 percent.
On the production-side, the sequential change was the result of an increase of value added in agriculture, forestry and fishing and in industry, whereas services marked a decrease.
From the demand side, there was a positive contribution by the domestic component and a negative one by the net export component.