German Economy Contracts 0.1% in Q2, Italian GDP Meets Expectations

Italy's economy experienced a growth of 0.2% in the second quarter of 2023, aligning with forecasts, according to preliminary data from the national statistics bureau ISTAT. On a year-on-year basis, the country's GDP increased by 0.9%. The Italian government had projected in April that the economy would expand by 1% for the year, similar to the previous year's growth rate of 0.3%. The growth for the January-March period remained unrevised at 0.3%, while ISTAT slightly lowered the year-on-year rate to 0.6% from a previously reported 0.7%.

In contrast, Germany's economy contracted by 0.1% in the second quarter, as reported by preliminary data from Destatis. This unexpected shrinkage follows a narrow avoidance of recession at the beginning of the year. Despite easing inflation pressures, Germany's GDP failed to meet expectations, having grown by 0.3% in the first quarter. Year-on-year, the GDP adjusted for price and calendar effects showed a slight decline. The economic contraction comes as analysts had anticipated a 0.2% growth for the quarter. The Euro/USD exchange rate was minimally affected, trading at 1.0825.