Economically, Italy dropped into the mid-1990s

Since the introduction in the EU of a monetary union (around 1995), Italy has been suffering the worst period with several consecutive economic falls. In this blog, I recommended France and Italy to leave the EU as Germany squeezes them as a piton.   The 2020 COVID-19 pandemic for Italy also was much worse than for Germany. Figure 1 demonstrates that the real GDP per capita has been growing at a relatively good pace before 2000, and then a series of no-growth and fall episodes returned the Italian economy to 1995, i.e. to the start of the Monetary Union. Essentially, Italy lost 25 years for nothing in economic terms and this finding goes together with the incredible growth of Germany.  In 2019, real GDP per capita in Italy was $38,717 (constant 2015 US dollars) as reported in the OECD database. In 2020, the COVID-19 pandemic dramatically reduced the Italian economy. The curve in Figure 1 fell to $35,450, i.e. by $3,267 (see Figure 2).

This fall is smaller than in France, Austria, and the UK.  However, if to convert the absolute fall in the real GDP per capita into the relative fall one obtains 9.2%, i.e. almost the same as in France (9.3% fall) (see Figure 3). The COVID-19 situation in 2021 is not promising with the third wave coming before the end of the second wave. Therefore, the Italian economy has clear long-term economic and financial problems. Figure 3 shows that the trend in the rate of economic growth is negative since 1970, but the years after 2000 are the worst – just above or below the zero line.

Figure 1. Evolution of real GDP per capita in Italy according to the OECD database.

Figure 2. Evolution of real GDP per capita in Italy according to the OECD database. The 2020 fall is $3,267 (constant 2015 US dollars). 

Figure 3. Evolution of the growth rate in real GDP per capita in Italy according to the OECD database. In 2020, the overall fall is 9.2%, which is much larger than in 2009 – 6.2%. The trend in the rate of economic growth is negative since 1970, but the years after 2000 are the worst – just above or below the zero line.