The recession which the Italian economy entered in late 2010 continued in 2013 (-1.8%), compounded by the political crisis in the country. The context of uncertainty, financial restrictions and fiscal consolidation had a negative impact on consumption and investment. Growth is expected to return to positive numbers in 2014 ( 0.7%), conditioned by constitutional reforms to avoid future political obstacles.
Benefiting from lower interest rates, the country has now exited the Excessive deficit procedure (the deficit should remain below 3%), but the economic indicators are still very worrisome. Public debt exceeds 2000 billion euro (136 % of GDP) and household consumption and investments have shrunk .
The cabinet appointed by Letta in April focused on measures to mitigate the effects of the crisis by financing partial unemployment and abolishing the property tax. After Mario Monti's resignation last year , Prime Minister Enrico Letta has also resigned and should be replaced by the new leader of the PD Matteo Renzi. Political instability has had an impact on the country's economic situation. Debt reduction and the protection of the banking system must remain a priority.
The unemployment rate, which has increased since the global financial crisis, is around 12.5%, excluding partial unempoyment. Young people have been the hardest hit, with a rate of unemployment close to 30 %. Regional inequalities betweent he highly industrialized and dynamic North and the poor rural southern Mezzogiorno areas are high and organized crime remains a problem.
|Main Indicators||2010||2011||2012||2013||2014 (e)|
|GDP (billions USD)||2,059.19||2,196.33||2,014.08e||2,068.37e||2,147.97|
|GDP (Constant Prices, Annual % Change)||1.7||0.4||-2.4e||-1.8e||0.7|
|GDP per Capita (USD)||34,126||36,227||33,115e||33,909e||35,123|
|General Government Balance (in % of GDP)||-3.6||-3.5||-1.3e||-0.2e||-0.0|
|General Government Gross Debt (in % of GDP)||119.3||120.8||127.0e||132.3e||133.1|
|Inflation Rate (%)||1.6||2.9||3.3e||1.6e||1.3|
|Unemployment Rate (% of the Labor Force)||8.4||8.4||10.7||12.5||12.4|
|Current Account (billions USD)||-72.34||-67.15||-14.88e||-0.23e||4.42|
|Current Account (in % of GDP)||-3.5||-3.1||-0.7e||-0.0e||0.2|
Source: IMF - World Economic Outlook Database - Last Available Data.
Note: (e) Estimated Data
The agricultural sector contributes to approximately 2% of the Italian GDP. Italy is the biggest European producer of rice, fruits, and vegetables, as well as the world’s biggest wine producer and exporter. The country is one of the major agricultural players in the European Union. Yet, Italy has limited natural resources. The country must import most of the raw materials required for production and more than 80% its energy.
The Italian fabric industry is mostly composed of small and medium family businesses. More than 90% of industrial companies have less than 100 employees, thus lowering the country’s competitiveness in the global market. Luxury goods (haute couture, cars, gourmet food items) play an important role in Italian industry. The country is the premier exporter of luxury goods. Precision machinery, motor vehicles, chemical products, pharmaceuticals, electrical items, fashion, and clothing make up its major industries.
The service sector contributes to 70% of the GDP. Tourism plays a major role, making Italy the third biggest tourist attraction in Europe, after France and Spain.
|Breakdown of Economic Activity By Sector||Agriculture||Industry||Services|
|Employment By Sector (in % of Total Employment)||3.7||27.8||68.5|
|Value Added (in % of GDP)||2.1||23.9||74.0|
|Value Added (Annual % Change)||0.3||-3.8||-0.9|
Source: World Bank - Last Available Data.
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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, labor 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.
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.
The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
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Last Updates: October 2014