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Italy's economy probably remained stagnant in third quarter - Bank of Italy

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ROME (Reuters) – Italy probably posted little or no economic growth in the third quarter, continuing the flat trend of the last 18 months, the Bank of Italy said on Friday.

“Economic activity in Italy seems to have remained almost stationary in the summer quarter, held back by the persistent weakness of the industrial cycle in the euro area as a whole,” the central bank said in its quarterly economic bulletin.

The bank said that the economy was probably supported between July and September by some moderate growth in the services and construction sectors.

The euro zone’s third-largest economy has been broadly stagnant for the last six quarters. Gross domestic product rose 0.1% in the second quarter from the previous three months and was also up 0.1% on a year-on-year basis.

The government of the anti-establishment 5-Star Movement and the centre-left Democratic Party forecasts that full-year 2019 growth will come in at just 0.1%, leaving Italy in its customary position among the euro zone’s most sluggish economies.

Industrial output probably fell 0.5% in the third quarter from the previous three months, the Bank of Italy said.

The bulletin said trade tariffs announced by the United States will apply to a relatively limited share of Italian exports, but the indirect impact could be “significant”.

It cited the effects “transmitted through trade with our partners in the euro area or as a result of European firms revising their plans.”

(Reporting by Giselda Vagnoni, editing by Gavin Jones)

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