Skyline of Florence, Italy

Italia Economic Data & Projections

Italy economic overview

Waning economic relevance:

Italy's economy—the Eurozone's third largest—has languished in recent years. In 2010, the country's GDP was roughly three-quarters that of France's; by 2022, that figure slipped to less than two-thirds. A declining population, a high stock of debt, a rigid jobs market and copious red tape all hold back momentum. Conditions vary considerably by region, with the south lagging far behind the more dynamic north in terms of economic growth and job creation.

Industrial strength:

Italy's industrial sector is still important to its economy, despite having lost clout over the last few decades as a share of GDP. Italy boasts particular strengths in automotive, pharmaceuticals, machinery, fashion and luxury goods. Global brands like Fiat, Ferrari, and Luxottica exemplify Italy's reputation for quality and design.

Tourism hotspot:

The services sector, including tourism, banking, and retail, plays a significant role in Italy's economy. Italy's rich cultural heritage and scenic beauty make it one of the world's top tourist destinations, significantly contributing to national revenue. The banking and finance sector, centered in Milan, is also important to the economy.

Myriad challenges:

Italy faces several economic challenges, including slow growth rates and one of the highest public debt levels in the world. Structural issues such as labor market rigidity, bureaucratic inefficiency, and a complex tax system contribute to these challenges. Addressing these issues is critical for sustainable economic growth.

Meager economic prospects:

In the coming years, large inflows of EU funding will support activity. However, comprehensive structural reforms to boost the country's meager potential growth rate are unlikely; as such, Italy will continue to lose economic clout relative to other Eurozone members over our forecast horizon.

Italy's economy in numbers:

Nominal GDP of USD 2,047 billion in 2022.

Nominal GDP of USD 2,302 billion in 2023.

GDP per capita of USD 39,109 compared to the global average of USD 10,589.

GDP per capita of USD 34,676 compared to the global average of USD 10,589.

Average real GDP growth of 0.3% over the last decade.

Average real GDP growth of 0.7% over the last decade.

Share of the region's population
Share of the region's GDP

Economic structure:

In 2021, services accounted for 75% of overall GDP, manufacturing 15%, other industrial activity 8%, and agriculture 2%. Looking at GDP by expenditure, private consumption accounted for 58% of GDP in 2021, government consumption 20%, fixed investment 20%, and net exports 2%.

GDP by economic sector
GDP by type of expenditure

International trade:

In 2021, manufactured products made up 81% of total merchandise exports, mineral fuels 3%, food 10%, ores and metals 3% and agricultural raw materials 1%, with other categories accounting for 2% of the total. In the same period, manufactured products made up 67% of total merchandise imports, mineral fuels 13%, food 10%, ores and metals 6% and agricultural raw materials 2%, with other goods accounting for 2% of the total. Total exports were worth USD 623 billion in 2022, while total imports were USD 641 billion.

Key exports
Key imports
Key export partners
Key import partners

Economic growth:

Italy's GDP growth over the last decade was sluggish, reflecting structural economic weaknesses such as dire demographics, low productivity growth, high public debt, a sclerotic bureaucracy and political uncertainty. The economy contracted sharply during the COVID-19 pandemic, exacerbating pre-existing issues. Recovery in 2021-2023 was supported by EU recovery funds, but long-term growth prospects remain constrained by structural barriers and the lack of deeper economic reforms. To read more about GDP growth in Italy, go to our dedicated page.

Fiscal policy:

Italy's fiscal deficit was in line with the European Commission's 3% target in the years before the pandemic, but has been much larger than that since. The COVID-19 pandemic exacerbated fiscal pressures, leading to increased spending and debt. The government has struggled to control the deficit since, partly due to difficulties in dealing with the unwinding of generous construction subsidies. Find out more on our dedicated page.

Unemployment:

Italy's unemployment rate over the last decade reflected its economic challenges and sluggish growth. The rate was in double digits in the early part of the decade, with only gradual improvements due to structural issues and slow economic recovery. While the unemployment rate fell to an over-decade low in 2022, it remained higher than the European average, indicating ongoing challenges in the Italian job market. For more information on Italy's unemployment click here.

Inflation:

Italy faced generally low inflation rates until the pandemic, often close to or below 0%, as a result of weak domestic demand. That said, the picture has changed notably since the pandemic: Inflation was well above the European Central Bank's 2% target in 2022 and 2023, due to global supply pressures, a strong bounce-back in economic activity, a rise in protectionism and the reduction of Russian gas flows. Go to our Italy inflation page for extra insight.

Monetary Policy:

In Italy, monetary policy is determined by the European Central Bank (ECB). The European Central Bank (ECB) maintained historically low policy rates from 2013 to 2021, reflecting prolonged economic sluggishness and low inflation in the Euro area. By 2022 however, the focus had shifted towards normalizing policy in response to economic recovery and rising inflation, with policy rates hiked to an over decade high. See our Italy monetary policy page for additional details.

Exchange Rate:

Italy is part of the Euro area single currency bloc. The euro saw volatility over the last decade in response to changes in global risk sentiment, and relative interest rates in the U.S. vs Europe. That said, the euro has tended to depreciate vs the dollar, likely on higher safe-haven demand and the United States' economic outperformance relative to the Eurozone. For more info on the euro, click here.
After decelerating in sequential terms in Q2, the economy likely grew at a similar pace in Q3, according to our panelists. Monthly retail sales grew at a slightly faster pace in July–August compared to Q2. Additionally, merchandise exports rebounded in annual terms in July, hinting at a recovery in external demand. That said, industrial output inched down in July–August from Q2, and manufacturing PMI data pointed to sustained weakness in the sector in September. In other news, in mid-October, the cabinet agreed on its budget for 2025. The draft aims to reduce public debt by imposing more taxes on banks and insurers and cutting expenses in public administration. The government also reaffirmed its commitment to cutting the fiscal wedge and boosting aid to low-income households.
Projections out to 2034.

55 indicators covered including both annual and quarterly frequencies.

Consensus Forecasts based on a panel of 51 expert analysts.

Want to get insight on the economic outlook for Italy in the coming years? FocusEconomics collects projections out to 2034 on 55 economic indicators for Italy from a panel of 51 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts, and averaged to provide one Consensus Forecast you can rely on for each indicator. This means you avoid the risk of relying on out of date, biased or outlier forecasts. Our Consensus Forecasts can be visualized in whichever way best suits your needs, including via interactive online dashboards , direct data delivery and executive-style reports which combine analysts' projections with timely written analysis from our in-house team of economists on the latest developments in the Italy economy. To download a sample report on the Italy's economy, click here. To get in touch with our team for more information, fill in the form at the bottom of this page.

Italia Datos económicos

2018 2019 2020 2021 2022
Población (millones) 59.9 59.8 59.6 59.2 59.2
PIB (en millones de euros) 1,771 1,796 1,660 1,786 1,910
PIB per cápita (EUR) 29,553 30,032 27,827 30,148 32,271
Crecimiento económico (PIB nominal, var. anual) 1.9 1.4 -7.6 7.6 6.9
Crecimiento económico (PIB, var. anual) 0.8 0.5 -9.0 7.0 3.8
Demanda interna (% var. anual) 1.1 0.2 -8.0 6.6 4.8
Consumo privado (% var. anual) 1.0 0.2 -10.4 4.7 4.6
Consumo público (var. anual) 0.1 -0.6 0.0 1.5 0.0
Inversión fija (% var. anual) 2.8 1.2 -8.0 18.6 9.7
Exportaciones (G&S, % var. anual) 1.6 1.8 -14.3 14.1 10.2
Importaciones (G&S, % var. anual) 2.8 -0.5 -12.7 15.3 12.5
Producción industrial (% var. anual) 0.9 -1.1 -11.4 12.2 0.4
Ventas al por menor (% var. anual) -0.4 0.7 -5.9 7.3 -0.7
Renta disponible (var. anual) 1.7 0.7 -2.3 3.6 -
Desempleo (% de la población activa, eop) 10.3 9.7 9.8 8.8 7.8
Desempleo (% de la población activa, aop) 10.6 9.9 9.3 9.5 8.1
Saldo fiscal (% del PIB) -2.2 -1.5 -9.5 -7.2 -
Deuda pública (% del PIB) 134.4 134.1 154.9 150.3 -
Inflación (IPCA, % var. anual, eop) 1.1 0.4 -0.2 4.2 12.3
Inflación (IPCA, % var. anual, aop) 1.3 0.6 -0.1 2.0 8.7
Inflación (IPP, % var. anual, aop) 3.3 0.2 -3.3 10.7 34.4
Tipo de refinanciación del BCE (%, eop) 0.00 0.00 0.00 0.00 2.50
EURIBOR a 3 meses (%, eop) -0.31 -0.38 -0.55 -0.57 2.13
Rendimiento de los bonos a 10 años (%, eop) 2.74 1.40 0.55 1.17 4.67
Bolsa (var. del FTSE MIB %) -16.2 28.3 -5.4 23.0 -13.3
Tipo de cambio (USD por EUR, eop) 1.14 1.12 1.22 1.14 1.07
Tipo de cambio (USD por EUR, aop) 1.18 1.12 1.14 1.18 1.05
Balanza por cuenta corriente (en millones de euros) 46.1 59.5 64.0 54.4 -14.0
Balanza por cuenta corriente (% del PIB) 2.6 3.3 3.9 3.0 -0.7
Balanza comercial de mercancías (en millones de euros) 45.9 60.7 68.3 53.6 -14.9
Inversión extranjera directa (en millones de euros) 33.0 16.2 -19.3 7.5 -

Frequently Asked Question about Italy's Economy

  1. What is the performance of the Italian economy?

  2. After a significant post-pandemic rebound, Italy's GDP growth has slowed. Challenges include high public debt and inflation, slow productivity growth, and regional disparities. The government focused on reforms and investment, particularly in green energy and digital infrastructure, to stimulate long-term growth.

  3. Why is Italy struggling economically?

  4. Italy's economic struggles stem from high public debt, slow productivity growth, and regional disparities. Additional challenges include an aging population and bureaucratic inefficiencies. These factors have constrained economic growth and recovery efforts.

  5. Does Italy have a strong economy?

  6. While Italy boasts the 3rd largest economy in the Euro area and a strong manufacturing sector, it also faces challenges such as high public debt, sluggish growth and structural rigidities.

  7. What is the main economic sector in Italy?

  8. Italy's main economic sector is services, which includes finance, tourism, and retail and comprises over 70% of GDP. This sector benefits from a strong tourism industry and a large and skilled workforce. Manufacturing, particularly in high-quality consumer goods like fashion, automotive, and machinery, also plays a crucial role in Italy's economic landscape.

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