Economy of Italy

Economy of Italy
Milan is the economic capital of Italy,[1] and is a global financial centre and a fashion capital of the world.
CurrencyEuro (EUR, €) (Except in Campione d'Italia – CHF)
Calendar Year
Trade organisations
EU, WTO, G-20, G7, OECD, AIIB
Country group
Statistics
Population58,850,717 (31 December 2022)[6]
GDP
GDP rank
GDP growth
  • 3.9% (2022)
  • 0.9% (2023)
  • 0.7% (2024)[7]
GDP per capita
  • Increase $39,580 (nominal; 2024)[7]
  • Increase $56,905 (PPP; 2024)[7]
GDP per capita rank
GDP by sector
4.5% (2023)[7]
Population below poverty line
  • Steady 9.4% (2021)[9]
  • 22.8% at risk of poverty or social exclusion (AROPE 2023)[10]
31.5 medium (2023)[11]
Decrease 56 out of 100 points (2023)[13] (42nd)
Labour force
  • Decrease 44.4 million (2021)[14]
  • Increase 66.3% employment rate (2023)[15]
Labour force by occupation
Unemployment
  • Steady 6.8% (May 2024)[16]
  • Negative increase 20.5% youth unemployment (15 to 24 year-olds; May 2024)[16]
  • Positive decrease 1.753 million unemployed (May 2024)[16]
Average gross salary
€2,500 / $2,763.35 monthly[17] (2022)
€1,740 / $1,923.29 monthly[18][19] (2022)
Main industries
External
ExportsIncrease $626 billion (2023)[8]
Export goods
Engineering products, textiles and clothing, production machinery, motor vehicles, transport equipment, chemicals; foodstuffs, beverages, and tobacco; minerals, nonferrous metals
Main export partners
ImportsDecrease $591 billion (2021)[8]
Import goods
Engineering products, chemicals, transport equipment, energy products, minerals and nonferrous metals, textiles and clothing; food, beverages, tobacco
Main import partners
FDI stock
  • Increase $552.1 billion (31 December 2017 est.)[8]
  • Increase Abroad: $671.8 billion (31 December 2017 est.)[8]
Increase $59.52 billion (2019 est.)[8]
$3.024 trillion (31 December 2020)[21]
Public finances
  • Positive decrease 134.8% of GDP (2023)[22]
  • Negative increase €2.410 trillion (2019)[23]
  • €29.3 billion deficit (2019)[23]
  • −1.6% of GDP (2019)[23]
Revenues47.1% of GDP (2019)[23]
Expenses48.7% of GDP (2019)[23]
Economic aid
Increase $211.3 billion (November 2022 est.)[8]
All values, unless otherwise stated, are in US dollars.

The economy of Italy is a highly developed social market economy.[30] It is the third-largest national economy in the European Union, the second-largest manufacturing industry in Europe (7th-largest in the world),[31] the 8th-largest economy in the world by nominal GDP, and the 12th-largest by GDP (PPP). Italy is a developed country with a high nominal per capita income globally, and its advanced diversified economy ranks among the largest in the world, dominated by the tertiary service sector. It is a great power and a founding member of the European Union, the Eurozone, the Schengen Area, the OECD, the G7 and the G20;[32] it is the eighth-largest exporter in the world, with $611 billion exported in 2021. Its closest trade ties are with the other countries of the European Union, with whom it conducts about 59% of its total trade. The largest trading partners, in order of market share in exports, are Germany (12.5%), France (10.3%), the United States (9%), Spain (5.2%), the United Kingdom (5.2%) and Switzerland (4.6%).[33]

In the post-World War II period, Italy saw a transformation from an agricultural-based economy which had been severely affected by the consequences of the World Wars, into one of the world's most advanced nations,[34] and a leading country in world trade and exports. According to the Human Development Index, the country enjoys a very high standard of living. According to The Economist, Italy has the world's 8th highest quality of life.[35] Italy owns the world's third-largest gold reserve,[36] and is the third-largest net contributor to the budget of the European Union. Furthermore, the advanced country private wealth is one of the largest in the world.[37] In terms of private wealth, Italy ranks second, after Hong Kong, in private wealth to GDP ratio. Among OECD members, Italy has a highly efficient and strong social security system, which comprises roughly 24.4% of GDP.[5][38][4]

Italy is the world's seventh-largest manufacturing country,[39] characterised by a smaller number of global multinational corporations than other economies of comparable size and many dynamic small and medium-sized enterprises, notoriously clustered in several industrial districts, which are the backbone of the Italian economy. Italy is a large manufacturer[40] and exporter[41] of a significant variety of products. Its products include machinery, vehicles, pharmaceuticals, furniture, food and clothing.[42] Italy has a significant trade surplus. The country is also well known for its influential and innovative business economic sector, an industrious and competitive agricultural sector (Italy is the world's largest wine producer),[43] and manufacturers of creatively designed, high-quality products: including automobiles, ships, home appliances, and designer clothing. Italy is the largest hub for luxury goods in Europe and the third-largest luxury hub globally.[44][45] Italy has a strong cooperative sector, with the largest share of the population (4.5%) employed by a cooperative in the EU.[46]

Despite these important achievements, the country's economy today suffers from few structural and non-structural problems. Annual growth rates have often been below the EU average. Italy was somewhat hit by the late-2000s recession. Massive government spending from the 1980s onwards has produced a severe rise in public debt. In addition, Italian living standards are extremely high on average, but have a considerable North–South divide: the average GDP per capita in the much richer Northern Italy significantly exceeds the EU average, while some regions and provinces in Southern Italy are significantly below the average. In Central Italy, GDP per capita is instead average.[47][48] In recent years, Italy's GDP per capita growth slowly caught-up with the Eurozone average,[49] while its employment rate also did. However, economists dispute the official figures because of the large number of informal jobs (estimated to be between 10% and 20% of the labour force) that lift the inactivity or unemployment rates.[50] The shadow economy is highly represented in Southern Italy, while it becomes less intense as one moves north. In real economic conditions, Southern Italy almost matches Central Italy's level.[51]

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