Italy is lagging the european economic recovery

CHART OF THE WEEK

First-quarter growth figures for most Eurozone nations have now been revealed. Overall Eurozone growth came in at an annualised 2.0% rate, although significant disparities between the countries exist. Figures for Germany, Austria, Belgium and the Netherlands are close to the Eurozone average, with Germany putting in a noteworthy performance. Spain has been posting growth rates in excess of 3.0% for several quarters, a figure well above the Eurozone average, and Portugal’s growth has also shot up recently. At the other end of the scale, France and especially Italy have put in weaker performances with Italy struggling to exceed 1.0%. Greece contracted once again, albeit at a slower rate.

OUR ANALYSIS

Both the PMI and European Commission indices confirm that the economic picture is improving for all European nations.

Against this positive backdrop, Italy’s chronic economic under-performance raises questions over its growth potential, especially with no further austerity in view.

Portugal has proved that a positive surprise should not be ruled out: it had seemed destined for a growth rate in the region of 1.0% until mid-2016 when it started to accelerate sharply. All the same, we believe that Italy deserves close monitoring, especially in the run-up to fresh élections.

The opinion expressed above is dated May 29th, 2017, and is liable to change.

This document is not pre-contractual or contractual in nature. It is provided for information purposes. The analyses and descriptions contained in this document shall not be interpreted as being advice or recommendations on the part of Lazard Frères Gestion SAS. This document does not constitute an offer or invitation to purchase or sell, nor an encouragement to invest. This document is the intellectual property of Lazard Frères Gestion SAS.


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Julien-Pierre Nouen

Directeur des études économiques et de la gestion diversifiée