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Italy '95 growth

highest among G7

ROME: Italy's economic growth last year, measured by gross domestic product (GDP) which rose 3.0 percent, was the strongest among the world's major industrialised nations, national statistics institute Istat said on Tuesday.

Istat said average GDP for 1995 was 3.0 percent against a revised 2.1 percent in 1994. This compared with 1995 GDP growth of 2.0 percent for the United States, 1.9 percent in Germany, 2.4 percent in France, 2.5 percent in Britain and 0.9 percent in Japan.

Italy's 3.0 percent figure was 0.4 percentage point above average European Union GDP growth, Istat noted.

"Generally, 1995 marked an extremely positive result for the Italian economy even though the year ended with a marked slowdown in growth," Istat said in a statement.

It said GDP growth followed an irregular pattern during the year. After a strong rise of 1.4 percent in the first quarter it remained flat in the second only to climb by 1.8 percent in the third quarter.

But in the October-December quarter, GDP slipped 0.9 percent on the previous quarter to post a rise of only 2.3 percent year-on-year against a third quarter increase of 3.2 percent and a 2.6 percent rise in the same 1994 final quarter.

Istat said according to available survey data, companies reported that in the second half of last year they built up an "undesired accumulation" of stocks of finished products.

The consequent partial destocking "seems to have contributed significantly to the reduction in GDP in the fourth quarter and to the fact that imports remained stationary," Istat noted.

Istat chief economist Enrico Giovannini said in March that this destocking did not yet seem to be over in the first quarter of this year, resulting in a continued slowing in GDP growth.

Budget Minister Mario Arcelli said on April 4 that the government forecast GDP growth this year at around 2.4 percent, compared with an original target of 3.0 percent growth.-Reuter