Italy's GDP revisions give Renzi good news before referendum - Metro US

Italy’s GDP revisions give Renzi good news before referendum

By Gavin Jones and Isla Binnie

By Gavin Jones and Isla Binnie

ROME (Reuters) – Italy’s economy rebounded in the third quarter and estimates of growth in previous quarters were revised upwards, which could help Prime Minister Matteo Renzi in a referendum on which he has staked his career.

Gross domestic product rose 0.3 percent quarter on quarter from July to September, the national statistics bureau ISTAT reported on Thursday, in line with its preliminary estimate issued last month.

However, on a year-on-year basis, growth was revised up to 1.0 percent from 0.9 percent, and ISTAT also raised its previous estimates of growth in the second and the first quarters.

As a result, the government looks likely to meet or slightly exceed its forecast for growth in 2016 of 0.8 percent, which it lowered in September from 1.2 percent.

In a post on his Facebook page, Renzi called the data “a great result” three days before a referendum on constitutional reform.

The premier has said he will resign if Italians reject his proposals to drastically reduce the role of the upper house, the Senate, and take back powers from regional authorities.

The growth rate of 0.3 percent in July-to-September compared with the previous three months marked an acceleration from 0.1 percent in the second quarter, which was revised up from a previous flat reading.

However, Renzi’s full-year growth target of 0.8 percent this year is only marginally above last year’s 0.7 percent and would leave Italy in its customary position as one of the most sluggish euro zone economies.

All opinion polls on the referendum published in the month before a Nov. 18 legal cut-off put the ‘No’ camp ahead, and dissatisfaction with the economy has weighed on Renzi’s popularity.

“If you look around, you see stagnation. More businesses keep closing, the real estate market has fallen,” said Giorgio Marchini, a 60-year-old bank manager from Rome. “I feel so angry that so many years have been lost. Of course, signs of growth are encouraging, but it’s not sufficient.”

ISTAT also reported on Thursday that the unemployment rate edged down to 11.6 percent in October. But some 30,000 jobs were lost from the month before and, as with economic growth, Italy’s rate compared badly with its euro zone partners.

Average joblessness in the 19-nation currency bloc declined to a seven-year-low of 9.8 percent, Eurostat reported.

“There are zero possibilities in Italy, except for those entirely based on precarious work,” said Emilio Bellezza, a 28- year-old sociology student from Rome. “There is a total lack of prospects, they just don’t exist.”

Italian joblessness has been oscillating between 11.4 percent and 11.7 percent for the last 15 months, despite a contested labour market reform introduced by Renzi last year intended to make hiring and firing easier.

October’s rate was down from 11.7 percent in September but higher than August’s 11.5 percent.

Moreover, the marginal fall in the unemployment rate was caused by people withdrawing from the labour market altogether, not to more people finding work. A net 30,000 jobs were lost from the month before.

Italy’s overall employment rate, one of the lowest in the euro zone, slipped to 57.2 percent in October from 57.3 percent in September.

The third-quarter GDP data showed consumer spending, investments and inventory accumulation each contributed 0.1 percentage points to quarterly growth. That was partly offset by a negative contribution from trade flows.

(Editing by Larry King)

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