From the expenditure side, the positive contribution to GDP growth came from household consumption (0.2 percentage points), fixed investment (0.1 percentage points) and inventory changes (0.1 percentage points). Meanwhile, both government spending and net exports offered no contribution to quarterly growth.
Household expenditure grew 0.3 percent (0.5 percent in Q1) and gross fixed capital formation rebounded by 0.7 percent (-1.6 percent in Q1), boosted by stronger investment in machinery and equipment (0.6 percent from -4.5 percent in Q1) and transport equipment (8.2 percent from 2 percent in Q1). Meanwhile, investment in construction contracted 0.4 percent (0.7 percent in Q1). Also, government spending edged down 0.1 percent (0.5 percent in Q1), and net external demand made no contribution to growth, with rises in imports and exports canceling each other out. Imports increased 0.7 percent (1.6 percent in Q1) and exports went up 0.6 percent (1.6 percent in Q1).
From the production side, service sector grew 0.4 percent (0.6 percent in Q1); and industrial output expanded 0.6 percent percent (-0.3 percent in Q1), as manufacturing rose 0.9 percent (-0.5 percent in Q1) while construction shrank 0.4 percent (0.5 percent in Q1). By contrast, agriculture contracted 2.2 percent (3.5 percent in Q1).
Compared with the same quarter a year earlier, the economy expanded 1.5 percent after growing 1.2 percent in the previous period, in line with the preliminary estimate. It was the strongest pace of expansion since the second quarter of 2011.
The government of Prime Minister Paolo Gentiloni is expected to raise its forecast for 2017 GDP growth to around 1.4 percent when it issues new economic targets next month, up from a current target of 1.1 percent.