Gross domestic product (GDP) contracted by 0.3% on a quarterly basis between April and June and was up 0.6% year-on-year, national statistics bureau ISTAT said. ISTAT gave no numerical sector breakdown of its preliminary second-quarter GDP estimate, but said industry and agriculture output decreased whereas services grew marginally. The 0.3% contraction left Italy with so-called "carryover" growth of 0.8% this year, assuming GDP would be flat in the remaining two quarters. "Italy is an advanced industrial country and the weakness in industry is much more important than the tourism sector for the economy's health," said Lorenzo Codogno, head of LC Macro Advisors and former chief economist at Italy's Treasury. ISTAT also said annual inflation slowed to 6.4% in July from 6.7% in June, on a EU-harmonised consumer prices.

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Persons: Giorgia Meloni, Franziska Palmas, Intesa, Lorenzo Codogno, Alvise Armellini, Elvira Pollina, Sharon Singleton, Alistair Bell Organizations: Gross, Reuters, Capital Economics, ISTAT, LC Macro Advisors, Italy's Treasury, Thomson Locations: ROME, Italy, Rome, Milan