Italy's economy remained flat in the third quarter compared to the previous quarter, largely due to declines in exports and investments, according to data released by the national statistics bureau, ISTAT, on Monday.

This confirmed provisional figures announced earlier.

Year-over-year, the GDP grew by 0.4%, aligning with ISTAT's initial estimate issued on 30th October.

A detailed analysis of the GDP components revealed that robust consumer spending provided some support to the economy. However, its impact was counterbalanced by steep quarterly drops in exports and investment activities, highlighting the challenges facing the eurozone's third-largest economy, Reuters reports.

The Italian government, led by Prime Minister Giorgia Meloni, has projected a full-year economic growth of 1% for 2024. However, many analysts have expressed scepticism about the feasibility of this target, citing weaker-than-expected performance indicators.

ISTAT warned on Monday that if economic activity stagnates again in the fourth quarter, as it did in the third, the full-year growth for 2024 could drop significantly to just 0.5%.

Recent data paints a challenging picture for Italy's economy. Both consumer and business confidence have been on a downward trend, reflecting increasing uncertainty and pessimism. Compounding these concerns, the manufacturing sector contracted in November at its sharpest rate of the year, signalling deeper struggles in one of the country’s key economic drivers. 

Despite broader economic challenges, Italy's labour market has shown resilience. The unemployment rate fell in October to its lowest level since 2007.

In the third quarter, consumer spending provided a notable boost, rising by 1.4% compared to the previous quarter, according to ISTAT. Imports also increased by 1.2%, indicating steady domestic demand for foreign goods. However, these gains were offset by a 0.9% contraction in exports, highlighting struggles in external trade, and a 1.2% decline in investments.

Furthermore, an additional positive contributor to the quarter's GDP was inventory accumulation, which added 0.2 percentage points to the overall quarter-on-quarter growth figure. 

The second quarter saw a confirmed quarter-on-quarter growth of 0.2%, while the year-on-year growth rate was revised upward to 0.7%, slightly higher than the previously reported 0.6%.