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El context econòmic d'Itàlia

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.


Italy's economy was heavily impacted by the global financial crisis and only emerged from recession in 2015; however, the country was one of the most affected by the COVID-19-induced crisis. After losing almost 9% in 2020, Italy’s GDP rebounded by an estimated 5.8% in 2021, on the back of private consumption and higher investments. The Italian economy is expected to embark on a stable and sustained expansion path this year (+4.2%), thanks to investments financed by EU’s Recovery and Resilience Facility (RRF), the easing of supply shortages, and an expansive budgetary policy. For 2023, the IMF forecasts a growth of 1.6% (2.3% according to the European Commission), a rate still sizeably higher than Italy’s long-term average.

The country’s primary budget (which excludes interest payments) is structurally positive; however, the interest cost on the government’s debt weighs heavily on Italy’s accounts, with the general government budget being structurally in deficit. This trend was exacerbated by the COVID-19-induced crisis (estimated at 4% of GDP in 2021 by the European Commission), which prompted a reduction in revenues from both direct and indirect taxes, as well as by increased government expenditure. Overall, the general government balance was negative by 7.1%. The global recovery and the phasing-out of COVID-related support measures should favour a gradual decrease of the deficit over the forecast horizon (3.8% this year and 3.3% in 2023 - IMF). The historically-high debt-to-GDP ratio spiked by more than 20pp in 2020, decreasing only marginally in 2021 (154.8%). Interest expenditure is set to steadily decline as a share of GDP in light of favourable financing conditions, benefiting the debt-to-GDP ratio which is expected to be around 150%. Being a net importer of energy, Italy’s inflation was pushed by rising global energy costs over the course of 2021, with headline inflation above 1.7%. A similar rate should be recorded this year (1.8%) before the index starts to decrease in 2023 (1.2% - IMF).

The unemployment rate, which has been on the rise since the global financial crisis, started dropping in recent years; however, it spiked in the aftermath of the global pandemic crisis, reaching 10.3% in 2021. The end of pandemic-relief measures (including the general dismissal ban and job retention schemes for workers in the manufacturing and construction sector) are expected to cause a marginal increase of the unemployment rate this year (11.6%), before falling to 11.4% by 2023 (9.2% as per the EU Commission estimates), amid a gradual rise in labour supply. Italy has high levels of youth unemployment (29.8% as of Sept. 2021 according to ISTAT), and regional inequalities between the highly industrialised and dynamic North and the poorer, rural southern “Mezzogiorno” areas are still high. Furthermore, Italy has to face a falling birth rate and a declining population. Italy’s GDP per capita (PPP) was estimated at USD 43,376 by the IMF in 2021, just below the EU-27 average (Eurostat).

 
Main Indicators 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 2,005.141,884.942,120.232,272.272,369.65
GDP (Constant Prices, Annual % Change) 0.3-8.96.23.82.2
GDP per Capita (USD) 33,521e31,60435,58538,16939,831
General Government Balance (in % of GDP) -0.9-5.9e-7.1-3.8-3.3
General Government Gross Debt (in % of GDP) 134.6155.8e154.8150.4149.4
Inflation Rate (%) 0.6-0.11.71.81.2
Unemployment Rate (% of the Labour Force) 10.09.3e10.311.611.4
Current Account (billions USD) 64.2866.8678.8280.8384.24
Current Account (in % of GDP) 3.23.53.73.63.6

Source: IMF – World Economic Outlook Database, October 2021

Note: (e) Estimated Data

Main Sectors of Industry

Italy is one of the main agricultural players in the EU, being the biggest European producer of rice, fruits, vegetables and wine. The agricultural sector represents 2% of Italian GDP and is heavily reliant on the import of raw materials utilised in agricultural production due to the country’s limited natural resources (Italian imports of raw materials are responsible for more than 80% of the country’s energy). The primary sector employs 4% of the workforce (World Bank, latest data available), and is comprised of around 1.3 million farms of which almost half have a small agricultural output (European Commission). The country has 12.8 million ha of agricultural land and its main crops include cereals (particularly wheat), corn, barley, rice and oats. Italy is also the first world producer of wine and the first producer of tobacco in Europe.

Italy is a primary industrial country, with the secondary sector accounting for 21.6% of GDP and employing 26% of the active population (World Bank, latest data available). The country’s industrial activity is concentrated in the northern part of the country, including cities such as Turin, Milan and Venice. Much of the Italian industry is comprised of small and medium-sized family businesses, with the majority of Italian industrial companies having less than 50 employees. Italy is the largest global exporter of luxury goods (clothing, cars, etc.). Other major Italian industries include precision machinery, motor vehicles, chemical products, pharmaceuticals, electrical items, fashion and clothing. The country has suffered from deindustrialisation (especially during the global financial crisis), but it remains Europe's second-largest manufacturing power and the seventh-largest worldwide.

The service sector constitutes two-thirds of Italian GDP (66.7%) and employs 70% of the country’s workforce. Tourism - one of the fastest growing and most profitable industries in Italy - comprises the largest part of the service sector (Italy is the fifth most visited country internationally and the third most visited in Europe): according to the national statistical agency ISTAT, tourism and its related activities generate 6% of the economy’s added value. Nevertheless, the sector was severely impacted by the COVID-19 pandemic, which caused a 40% contraction in tourism revenues (Bank of Italy). Business-related services also play an important role in the country’s economy. It is estimated that more than half of Italy’s 5 million companies are active in the tertiary sector.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 3.9 25.9 70.2
Value Added (in % of GDP) 2.0 21.5 66.8
Value Added (Annual % Change) -6.0 -10.2 -8.1

Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.

 

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Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.}}

Score:
64,9/100
World Rank:
68
Regional Rank:
36

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 

Business environment ranking

Definition:

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

Score:
6.57/10
World Rank:
39/82

Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024

 

Country Risk

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