This is ahistory of the economy of Italy. For more information on historical, cultural, demographic and sociological developments in Italy, see the chronological era articles in the template to the right. For more information on specific political and governmental regimes in Italy, see the Kingdom and Fascist regime articles. Theeconomic history of pre-unitarian Italy traces the economic and social changes of the Italian territory from Roman times to theunification of Italy (1860).
Until the end of the 16th century, Italy was highly prosperous relative to other parts of Europe. From the end of the 16th century, Italy stagnated relative to other parts of Europe.[1] Italy remained a leading European economy until the first half of the 19th century when it was overtaken by France and Germany.[2] At the time ofItalian unification, Italy's GDP per capita was about half of that of Britain.[1][3] By the 1980s, Italy had similar GDP per capita as Great Britain.[3][4] Since the mid-1990s, the Italian economy has declined in both relative and absolute terms,[4] as well as experienced a decline in aggregate productivity.[5]
Within Italy, theSouth andNorth diverge considerably in terms of economic fortune.[2] The divergence began to emerge in the 15th century and gradually enlarged over the subsequent centuries.[2]
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In Roman times, theItalian Peninsula had a higher population density and economic prosperity than the rest of Europe and theMediterranean Basin, especially during the 1st and 2nd centuries. Beginning in the 3rd century CE, theRoman Empire began to decline, and so did the Italian territory and its cities.[6]
During theearly Middle Ages (7th–9th centuries), the economy was in a depressed, semi-subsistence state, gravitating around feudal centers. Beginning in the 10th century, the Italian population and economy began to grow again, along with urban centers. Extensive trade networks developed over time, linking Italian centers to a network of relations from Asia to northern Europe. These centers of manufacturing, financial, mercantile and cultural activities made the Italian economy more prosperous than other European countries.[7]
The arrival of theBlack Death in the mid-1300s decimated the population, but it was soon followed by an economic revival. This growth produced a prosperousRenaissance economy that was advanced compared to European countries. Italy's leading sectors were textiles (woollen and silk workmanship, widely exported), banking services, and maritime transport.[8]
The Italian Renaissance was remarkable in economic development. Venice and Genoa were the trade pioneers, first as maritime republics and then as regional states, followed by Milan, Florence, and the rest of northern Italy. Some reasons for their early development are the relative military safety of Venetian lagoons, the high population density and the institutional structure which inspired entrepreneurs.[9] The Republic ofVenice was the first realinternational financial center, which slowly emerged from the 9th century to its peak in the 14th century.[10] Tradeablebonds as a commonly used type of security, were invented by theItalian city-states (such as Venice andGenoa) of the latemedieval and earlyRenaissance periods.
After 1600 Italy experienced an economic catastrophe. In 1600 Northern and Central Italy comprised one of the most advanced industrial areas of Europe. There was an exceptionally high standard of living.[11] By 1870 Italy was an economically backward and depressed area; its industrial structure had almost collapsed, its population was too high for its resources, its economy had become primarily agricultural. Wars, political fractionalization, limited fiscal capacity and the shift of world trade to north-western Europe and the Americas were key factors.[12][13]
The economic history of Italy after 1861 can be divided in three main phases:[15] an initial period of struggle after the unification of the country, characterised by high emigration and stagnant growth; a central period of robust catch-up from the 1890s to the 1980s, interrupted by theGreat Depression of the 1930s and the two world wars; and a final period of sluggish growth that has been exacerbated by a double-dip recession following the 2008 global financial crush, and from which the country is slowly reemerging only in recent years.
Prior to unification, the economy of the many Italian statelets was overwhelmingly agrarian; however, the agricultural surplus produced what historians call a "pre-industrial" transformation in North-western Italy starting from the 1820s,[16] that led to a diffuse, if mostly artisanal, concentration of manufacturing activities, especially inPiedmont-Sardinia under the liberal rule of theCount of Cavour.[17]
After thebirth of the unified Kingdom of Italy in 1861, there was a deep consciousness in the ruling class of the new country's backwardness, given that the per capita GDP expressed in PPS terms was roughly half of that of Britain and about 25% less than that of France and Germany.[15] During the 1860s and 1870s, the manufacturing activity was backward and small-scale, while the oversized agrarian sector was the backbone of the national economy. The country lacked large coal and iron deposits[18] and the population was largely illiterate. In the 1880s, a severefarm crisis led to the introduction of more modern farming techniques in thePo Valley,[19] while from 1878 to 1887protectionist policies were introduced with the aim to establish a heavy industry base.[20] Some large steel and iron works soon clustered around areas of highhydropower potential, notably the Alpine foothills and Umbria in central Italy, whileTurin andMilan led a textile, chemical, engineering and banking boom andGenoa captured civil and militaryshipbuilding.[21]
However, the diffusion of industrialisation that characterised the northwestern area of the country largely excluded Venetia and, especially, theSouth. The resultingItalian diaspora involved 29 million Italians (10.2 million of whom returned) between 1860 and 1985 and 9 million permanently left of 14 million who emigrated between 1876 and 1914 two-thirds of whom were men; by many scholars it is considered the biggest mass migration of contemporary times.[22] During theGreat War, the still frail Italian state successfully fought a modern war, being able of arming and training some 5 million recruits.[23] But this result came at a terrible cost: by the end of the war, Italy had lost 700,000 soldiers and had a ballooning sovereign debt amounting to billions oflira.
Theunification of Italy in 1861–70 broke down the feudal land system that had survived in the south sincethe Middle Ages, especially where land had been the inalienable property of aristocrats, religious bodies, or the king. The breakdown offeudalism, however, and redistribution of land did not necessarily lead to small farmers in the south winding up with land of their own or land they could work and profit from. Many remained landless, and plots grew smaller and smaller and thus more and more unproductive as land was subdivided among heirs.[24]TheItalian diaspora did not affect all regions of the nation equally, principally low income agricultural areas with a high proportion of small peasant land holdings. In the second phase of emigration (1900 toWorld War I) most emigrants were from the south and most of them were from rural areas, driven off the land by inefficientland management policies. Robert Foerster, inItalian Emigration of our Times (1919) says, " [Emigration has been]…well nigh expulsion; it has been exodus, in the sense of depopulation; it has been characteristically permanent.[25] ".
Mezzadria, a form of sharefarming where tenant families obtained a plot to work on from an owner and kept a reasonable share of the profits, was more prevalent in central Italy, which is one of the reasons why there was less emigration from that part of Italy. Although owning land was the basic yardstick of wealth, farming in the south was socially despised. People did not invest inagricultural equipment but in such things as low-risk state bonds.[24]
In the decades following theunification of Italy, thenorthern regions of the country, Lombardy,Piedmont andLiguria in particular, began a process of industrialization and economic development while thesouthern regions remained behind.[26] At the time of the unification of the country, there was a shortage of entrepreneurs in the south, with landowners who were often absent from their farms as they lived permanently in the city, leaving the management of their funds to managers, who were not encouraged by the owners to make the agricultural estates to the maximum.[27] Landowners invested not in agricultural equipment, but in such things as low-risk state bonds.[24]
In southern Italy, the unification of the country broke down the feudal land system, which had survived in the south since theMiddle Ages, especially where land had been the inalienable property of aristocrats, religious bodies or the king. The breakdown offeudalism, however, and redistribution of land did not necessarily lead to small farmers in the south winding up with land of their own or land they could work and make profit from. Many remained landless, and plots grew smaller and smaller and so less and less productive, as land was subdivided among heirs.[24]
This gap between northern and southern Italy, called "southern question", was also induced by the region-specific policies selected by the post-unitary governments.[28] For example, the 1887 protectionist reform, instead of safeguarding the arboriculture sectors crushed by 1880s fall in prices, shielded the Po Valley wheat breeding and those Northern textile and manufacturing industries that had survived the liberal years due to state intervention.[29] A similar logic guided the assignment of monopoly rights in the steamboat construction and navigation sectors and, above all, the public spending in the railway sector, which represented 53% of the 1861–1911 total.[30]
The resources necessary to finance the public spending effort were obtained through highly unbalanced land property taxes. This affected the savings available for investment in growth sectors, which also lacked a developed banking system.[31] Given the inability of the government to estimate the land profitability, especially because of the huge differences among the regional cadasters, this policy irreparably induced large regional discrepancies.[32] This policy destroyed the relationship between the central state and the Southern population by unchaining first a civil war calledBrigandage, which brought about 20,000 victims by 1864 and the militarization of the area, and then favouring emigration, especially from 1892 to 1921.[33]
The north–south gap was intensified by language differences. Southerners spoke theSicilian language or a variation of it: a language that developed from Latin and other influences independently of and prior to the Tuscan dialect that was adopted as the official Italian language ("standard Italian"). TheSicilian language is a complete, distinct language with its own vocabulary, syntax and grammar rules, the latter being less complex than standard Italian. But because of its similarity to Italian, northerners incorrectly assumed that it was an imperfect dialect of Italian and denigrated it as the "dialect of the poor and ignorant". This has led to continued bias by the North against southerners who "don't speak proper Italian".
After the rise ofBenito Mussolini, the "Iron Prefect"Cesare Mori tried to defeat the already powerfulcriminal organizations flourishing in the South with some degree of success. Fascist policy aimed at the creation of anItalian Empire and Southern Italian ports were strategic for all commerce towards the colonies. With the invasion of Southern Italy duringWorld War II, theAllies restored the authority of the mafia families, lost during the Fascist period, and used their influence to maintain public order.[34] Mussolini also established laws requiring standard Italian to be taught in school, and discouraging the use of local Italian dialects throughout the nation, as well as the Sicilian language.
In the 1950s theCassa per il Mezzogiorno was set up as a huge public master plan to help industrialize the South, aiming to do this in two ways: through land reforms creating 120,000 newsmallholdings, and through the "Growth Pole Strategy" whereby 60% of all government investment would go to the South, thus boosting the Southern economy by attracting new capital, stimulating local firms, and providing employment. However, the objectives were largely missed, and as a result, the South became increasingly subsidized and state-dependent, incapable of generating private growth itself.[35]
The imbalance between North and South was reduced in the 1960s and 1970s through the construction of public works, the implementation of agrarian and scholastic reforms,[36] the expansion of industrialization and the improved living conditions of thepopulation. This convergence process was interrupted, however, in the 1980s. To date, the per capita GDP of the South is just 58% of that of theCenter-North,[37] but this gap is mitigated by the fact that there thecost of living is around 10–15% lower on average (with even more differences between small towns and big cities) than that in the North of Italy.[38] In the South the unemployment rate is more than double (6.7% in the North against 14.9% in the South).[39] A study by Censis blames the pervasive presence ofcriminal organizations for the delay of Southern Italy, estimating an annual loss of wealth of 2.5% in the South in the period between 1981 and 2003 due to their presence, and that without them the per capita GDP of the South would have reached that of the North.[40]
Italy had emerged fromWorld War I in a poor and weakened condition. TheNational Fascist Party ofBenito Mussolini came to power in Italy in 1922, at the end of a period of social unrest. During the first four years of the new regime, from 1922 to 1925, the Fascist had a generallylaissez-faire economic policy: they initially reduced taxes, regulations and trade restrictions on the whole.[41] However, "once Mussolini acquired a firmer hold of power... laissez-faire was progressively abandoned in favour of government intervention, free trade was replaced byprotectionism and economic objectives were increasingly couched in exhortations and military terminology."[42] Italy reached a balanced budget in 1924–25 and was only partially hit by the 1929 crisis. The Fascist government nationalized the holdings of large banks which had accrued significant industrial securities,[43] and a number of mixed entities were formed, whose purpose was to bring together representatives of the government and major businesses. These representatives discussed economic policy and manipulated prices and wages to satisfy both the wishes of the government and the wishes of business. This economic model based on a partnership between government and business was soon extended to the political sphere, in what came to be known ascorporatism.
Throughout the 1930s, the Italian economy maintained the corporatist and autarchic model that had been established during the Great Depression. At the same time, however, Mussolini had growing ambitions of extending Italy's foreign influence through both diplomacy and military intervention. After the invasion of Ethiopia, Italy began supplying troops and equipment to the Spanish nationalists under GeneralFrancisco Franco, who were fighting in theSpanish Civil War against a leftist government. These foreign interventions required increased military spending, and the Italian economy became increasingly subordinated to the needs of its armed forces. By 1938, only 5.18% of workers were state employees. Only one million workers, out of a total 20 million, were employed in thepublic sector.[44]
Finally, Italy's involvement inWorld War II as a member of theAxis powers required the establishment of awar economy. This put severe strain on the corporatist model, since the war quickly started going badly for Italy and it became difficult for the government to persuade business leaders to finance what they saw as a military disaster. TheAllied invasion of Italy in 1943 caused the Italian political structure—and the economy—to rapidly collapse. The Allies, on the one hand, and the Germans on the other, took over the administration of the areas of Italy under their control. By the end of the war the Italian economy had been destroyed; per capita income in 1944 was at its lowest point since the beginning of the 20th century.[45] In contrast to European democracies in the time period, Italy under fascist rule saw growing inequality.[46]
The Italian economy has had very variable growth. In the 1950s and early 1960s, theItalian economy was booming, with record high growth rates, including 6.4% in 1959, 5.8% in 1960, 6.8% in 1961, and 6.1% in 1962. This rapid and sustained growth was due to the ambitions of several Italian businesspeople, the opening of new industries (helped by the discovery of hydrocarbons, made for iron and steel, in thePo valley), re-construction and modernization of most Italian cities, such as Milan, Rome and Turin, and the aid given to the country after World War II (notably theMarshall Plan).
After the end of World War II, Italy was in rubble and occupied by foreign armies, a condition that worsened the chronic development gap towards the more advanced European economies. However, the new geopolitical logic of theCold War made possible that the former enemy Italy, a hinge-country between Western Europe and theMediterranean, and now a new, fragile democracy threatened by theNATO occupation forces, the proximity of theIron Curtain and the presence of a strongCommunist party,[50] was considered by the United States as an important ally for theFree World, and received under theMarshall Plan over US$1.2 billion from 1947 to 1951.
The end of aid through the Plan could have stopped the recovery but it coincided with a crucial point in theKorean War whose demand for metal and manufactured products was a further stimulus of Italian industrial production. In addition, the creation in 1957 of theEuropean Common Market, with Italy as a founding member, provided more investment and eased exports.[51]
These favorable developments, combined with the presence of a large labour force, laid the foundation for spectacular economic growth that lasted almost uninterrupted until the "Hot Autumn's" massive strikes and social unrest of 1969–70, which then combined with the later1973 oil crisis and put an abrupt end to the prolonged boom. It has been calculated that the Italian economy experienced an average rate of growth of GDP of 5.8% per year between 1951 and 1963, and 5% per year between 1964 and 1973.[51] Italian rates of growth were second only, but very close, to theGerman rates, in Europe, and among theOEEC countries only Japan had been doing better.[52]
From 1964-1973, Italian GDP growth slumped to an average of 5.0% per year.[53] Due to political, economical and social problems in the country during the late-1960s and most of the 1970s,[54] the economy stagnated. In 1975, Italy entered its first recession after that of the late-1940s. The problems included an increasingly high inflation rate, high energy prices (Italy is highly dependent on foreign oil and natural gas resources), and increasing public debt. A series of emergency austerity measures were implemented, including reform of the sliding wage scale. As a result, Italy broke from recession by 1983, and inflation dropped to 12% from a high of 22%.[55] While growth increased, unemployment steadily rose and deficits continued to rise. A decrease in energy prices and lowered value of the dollar led to foreign exchange being liberalised and rapid economic regrowth.[55] In 1987, Italy briefly surpassed theBritish economy, becoming the sixth in the world.[56]
The 1970s and 1980s was also the period of investment and rapid economic growth in the South, unlike Northern and Central Italy which mainly grew in the 1950s and early 1960s. The "Vanoni Plan" ensured that a new programme to help growth in the South called "Cassa per il Mezzogiorno" (Funds for the "Mezzogiorno" – the latter being an unofficial term for Southern Italy, literally meaning "midday") was put in place. Investment was worth billions of US dollars: from 1951 to 1978, the funds spent in the South was $11.5 billion for infrastructure,[54] $13 billion for low-cost loans,[54] and outrighted grants were worth $3.2 billion.[54]
On 15 May 1991, Italy became the fourth worldwide economic power, overcoming France,[57] called the "secondo sorpasso" with a GDP of US$1.268 trillion, compared to France's GDP of US$1.209 trillion and Britain's of US$1.087 trillion. Despite the alleged 1987 GDP growth of 18% according tothe Economist's[58][59] Italy was then re-overtaken by all countries due to currency value change.
The 1970s were a period of economic, political turmoil and social unrest in Italy, known asYears of lead. Unemployment rose sharply, especially among the young, and by 1977 there were one million unemployed people under age 24. Inflation continued, aggravated by the increases in the price of oil in 1973 and 1979. The budget deficit became permanent and intractable, averaging about 10 percent of the gross domestic product (GDP), higher than any other industrial country. The lira fell steadily, from 560 lira to the U.S. dollar in 1973 to 1,400 lira in 1982.[60]
The economic recession went on into the mid-1980s until a set of reforms led to the independence of theBank of Italy[61] and a big reduction of the indexation of wages[62] that strongly reduced inflation rates, from 20.6% in 1980 to 4.7% in 1987.[63] The new macroeconomic and political stability resulted in a second, export-led "economic miracle", based onsmall and medium-sized enterprises, producing clothing, leather products, shoes, furniture, textiles, jewelry, and machine tools. As a result of this rapid expansion, in 1987 Italy overtook the UK's economy (an event known asil sorpasso), becoming the fourth richest nation in the world, after the US, Japan andWest Germany.[64] TheMilan stock exchange increased its market capitalization more than fivefold in the space of a few years.[65]
However, the Italian economy of the 1980s presented a problem: it was booming, thanks to increased productivity and surging exports, but unsustainable fiscal deficits drove the growth.[64] In the 1990s, the newMaastricht criteria boosted the urge to curb the public debt, already at 104% of GDP in 1992.[66] The consequent restrictive economic policies worsened the impact of theglobal recession already underway. After a brief recovery at the end of the 1990s, high tax rates andred tape caused the country to stagnate between 2000 and 2008.[67][68]
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By the 1990s, the Italian government was fighting to lower the internal and external debt, liberalise the economy, reduce governmental spending, selling business and enterprises owned by the state, and trying to stoptax evasion;[54] the liberalisation of the economy meant that Italy was able to enter theEMU (European Monetary Union) and it later, in 1999, qualified to enter theeurozone. However, the main problem which plagued the 1990s, and still plagues the economy today, was tax evasion and underground "black market" business, whose value is an estimated 25% of the country's gross domestic product.[54] Despite social and political attempts to reduce the difference in wealth between the North and South, and Southern Italy's modernisation, the economic gap remained still pretty wide.[54]
In the 1990s, and still today, Italy's strength was not the big enterprises or corporation, but small to middle-sized family owned businesses and industries, which mainly operated in the North-Western "economic/industrial triangle" (Milan-Turin-Genoa). Italy's companies are comparatively smaller than those of similar countries in size or of the EU, and rather than the common trend of less, yet bigger businesses, Italy concentrated on more, yet smaller enterprises. This can be seen in the fact, that the average workers per company in the country is of 3.6 employees (8.7 for industrial/manufacturing-orientated businesses), compared to the Western European Union average of 15 workers.[54]
In the recent decades, however, Italy's economic growth has been particularly stagnant, with an average of 1.23% compared to an EU average of 2.28%. Previously, Italy's economy had accelerated from 0.7% growth in 1996 to 1.4% in 1999 and continued to rise to about 2.90% in 2000, which was closer to the EU projected growth rate of 3.10%.
In a 2017 paper, economists Bruno Pellegrino and Luigi Zingales attribute the decline in Italian labor productivity since the mid-1990s to familyism and cronyism:[69]
We find no evidence that this slowdown is due to trade dynamics, Italy's inefficient governmental apparatus, or excessively protective labor regulations. By contrast, the data suggest that Italy's slowdown was more likely caused by the failure of its firms to take full advantage of the ICT revolution. While many institutional features can account for this failure, a prominent one is the lack of meritocracy in the selection and rewarding of managers. Familyism and cronyism are the ultimate causes of the Italian disease.
Italy's economy in the 21st century has been mixed, experiencing both relative economic growth and stagnation, recession and stability. In thelate 2000s recession, Italy was one of a few countries whose economy did not contract dramatically, and kept a relatively stable economic growth, although figures for economic growth in 2009 and 2010 averaged in the negatives, ranging from around −1% to −5%.[70] The late-first decade of the 21st century recession has also gripped Italy; car sales in Italy have fallen by almost 20 percent over each of the past two months. Italy's car workers' union said; "The situation is evidently more serious than had been understood."[71] On 10 July 2008 economic think tank ISAE lowered its growth forecast for Italy to 0.4 percent from 0.5 percent and cut the 2009 outlook to 0.7 percent from 1.2 percent.[72] Analysts have predicted Italy had entered a recession in the second quarter or would enter one by the end of the year with business confidence at its lowest levels since theSeptember 11 attacks.[73] Italy's economy contracted by 0.3 percent in the second quarter of 2008.[74]
In the 4 quarters of 2006, Italy's growth rates were approximately these: +0.6% in the Q1, +0.6% in the Q2, +0.65% in the Q3, and +1% in the Q4.[75] Similarly, in 2007's 4 quarters, these were the figures: +0.25% in the Q1, +0.1% in the Q2, +0.2% in the Q3, and −0.5% in the Q4.[75] In the 4 of 2008's quarters, the results, mainly negative, were these: +0.5% in the Q1, −0.6% in the Q2, −0.65% in the Q3 and −2.2% in the Q4.[75]
In the Q1 (1st quarter) of 2009, Italy's economy contracted by 4.9%, a greater contraction than the predictions of theItalian government, which believed that it would be of at most 4.8%.[75] The Q2 (2nd quarter) saw a smaller decrease in GDP, more or less that of −1%, and by the Q3 (3rd quarter), the economy began to re-grow slightly, with GDP increase rates of about +0.2% to +0.6%. Yet, in the Q4 (4th quarter) of the year 2009, Italy's GDP growth was of −0.2%.[75]ISTAT predicts that Italy's falling economic growth rate is due to a general decrease in the country's industrial production and exports.[75] However, the Government of Italy believes that 2010 and beyond will bring higher growth rates: anything from circa +0.7% – +1.1%.[75]
In the period 2014–2019, the economy partially recovered from the disastrous losses incurred during theGreat Recession, primarily thanks to strong exports, but nonetheless, growth rates remained well below theEuro area average, meaning that Italy's GDP in 2019 was still 5 per cent below its level in 2008.[76]
Starting from February 2020 after the United States had the first originated from China, Italy was the first country in Europe to be severely affected by theCOVID-19 pandemic,[77] that eventually expanded to the rest of the world.The economy suffered a massive shock as a result of thelockdown of most of the country's economic activity. After three months, at the end of May 2020, the pandemic was put under control, and the economy started to recover, especially, the manufacturing sector. Overall, it remained surprisingly resilient, although GDP plummeted like in most western countries.[78][79]The Italian government issued special treasury bills, known as BTP Futura[80] as a COVID-19 emergency funding, waiting for the approval of theE.U. response to the outbreak.[81]
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Italy was among the countries hit hardest by theGreat Recession of 2008–2009 and the subsequentEuropean debt crisis. The national economy shrunk by 6.76% during the whole period, totaling seven-quarters of recession.[82] In November 2011 the Italian bond yield was 6.74 percent for 10-year bonds, nearing a 7 percent level where Italy is thought to lose access to financial markets.[83] According toEurostat, in 2015 theItalian government debt stood at 128% of GDP, ranking as the second biggest debt ratio afterGreece (with 175%).[84] However, the biggest chunk of Italian public debt is owned by Italian nationals and relatively high levels of private savings and low levels of private indebtedness are seen as making it the safest among Europe's struggling economies.[85][86] As a shock therapy to avoid the debt crisis and kick-start growth, thenational unity government led by the economistMario Monti launched a program of massiveausterity measures, that brought down the deficit but precipitated adouble-dip recession in 2012 and 2013, receiving criticism from numerous economists.[87][88]
From 2014 to 2019 the economy had almost fully recovered from theGreat Recession of 2008 despite not having growth rates like the rest of the countries in theEuro area.[89]
Italy was the first among the countries of Europe to be affected by theCOVID-19 pandemic,[90] which in the months after February 2020 expanded to the rest of the world.The economy suffered a very severe shock as a result of thelockdown of most of the country's economic activity. By the end of May 2020, however, the epidemic was under control, and the economy began to start up again, especially the manufacturing sector. The economy remainsresilient, although far below the values prior to the COVID-19 pandemic.[91][92]
The Italian government has issued special BTP Futura[93] to compensate for the rising costs ofhealth care costs to deal with theCOVID-19 pandemic in Italy, waiting for Europe to proceed with a unitary support through theEuropean Recovery Fund.[94]
In 2022 after theCOVID-19 pandemic had mainly subsided the economy had grown by (3.16%) much more than 2020 were Italy was dealing withCOVID-19 and the Economy had dropped by (9.03%).[95] In other Countries such as the United Kingdom had a (−11.0%) growth rate.[96]
Beginning in 2022, after the COVID-19 pandemic, Italy restarted with a resilient economy[97] which nonetheless had to face theglobal energy crisis of 2021–2023, involving an increase in gas and other energy prices due to theRussian invasion of Ukraine on 24 February 2022. This crisis created the need to find an alternative supplier to Russia, subject toEuropean Union sanctions.With rising energy prices, inflationrose in Europe, which was addressed by theEuropean Central Bank with a progressive increase in interest rates.Furthermore, the PNRR (Piano Nazionale di Ripresa e Resilienza [it]) had to be re-calibrated and re-agreed with the European Union, to address the new geopolitical situation which led to theenergy crisis and damage to supply chains, causing shortages in raw materials.[98] In March 2023, theUnited States banking crisis occurred with some bankruptcies and restructuring of American banks, however it was soon understood that it was a short-lived economic-financial phenomenon limited to the United States, although with some concern, it has not had an impact in the European area, with the exception ofCredit Suisse. As a consequence, Italy is witnessing a tightening of its credit policies.
For Italian banks, there was an opportunity to strengthen themselves, thanks to the high rates imposed by theEuropean Central Bank. The new BTP Valore bonds were released, which were very successful among the private operators to whom they were marketed due to the high interest rates.[99][100] From 7 October 2023, geopolitical tensions are becoming more intense, related to theGaza war. In 2024, however, the Italian economy continues to maintain its resilient strength, thanks to the reduction in energy prices, and the maintenance or reduction of oil prices, this stability allows a reduction in inflation. In September 2024, the European Central Bank has decreased interest rates by 0.25 percentage points. The Italian economy copes with a geopolitical scenario that was significantly deteriorating with the exacerbation of ongoing war conflicts. Strategic assets are better protected, in particular theDefense Sector. Furthermore, the implementation of the PNRR plan, which must be completed by 2026, has brought benefits to many economic sectors.[101]
Italy has a long history of different coinage types, which spans thousands of years. Italy has been influential at a coinage point of view: the medievalFlorentine florin, one of the most used coinage types in European history and one of the most important coins in Western history,[102] was struck inFlorence in the 13th century, while theVenetian sequin, minted from 1284 to 1797, was the most prestigious gold coin in circulation in the commercial centers of theMediterranean Sea.[103]
Despite the fact that the first Italian coinage systems were used in theMagna Graecia andEtruscan civilization, theRomans introduceda widespread currency throughout Italy. Unlike most modern coins, Roman coins had intrinsic value.[104] The early modern Italian coins were very similar in style to French francs, especially in decimals, since it was ruled by the country in theNapoleonic Kingdom of Italy. They corresponded to a value of 0.29 grams of gold or 4.5 grams of silver.[105]
Since Italy has been for centuries divided into manyhistoric states, they all had different coinage systems, but when the country becameunified in 1861, theItalian lira came into place, and was used until 2002. The term originates fromlibra, the largest unit of theCarolingian monetary system used in Western Europe and elsewhere from the 8th to the 20th century.[106] In 1999, theeuro became Italy'sunit of account and the lira became a national subunit of the euro at a rate of 1 euro = 1,936.27 lire, before being replaced as cash in 2002.
A table showing the growth of Italy's GDP (PPP) growth from 2000 to 2008:
| 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 |
|---|---|---|---|---|---|---|---|---|
| 1,191,056.7 | 1,248,648.1 | 1,295,225.7 | 1,335,353.7 | 1,390,539.0 | 1,423,048.0 | 1,475,403.0 | 1,534,561.0 | 1,814,557.0 |
A table showing Italy's GDP per capita (PPP) growth from 2000 to 2008:[107]
| 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 |
|---|---|---|---|---|---|---|---|---|
| 20,917.0 | 21,914.9 | 22,660.7 | 23,181.3 | 23,902.6 | 24,281.2 | 25,031.6 | 25,921.4 | 26,276.40 |
A table showing the different compositions of the Italian economy:
| Macro-economic activity | GDP activity |
| Primary (agriculture, farming, fishing) | €27,193.33 |
| Secondary (industry, manufacturing, petrochemicals, processing) | €270,000.59 |
| Constructions | €79,775.99 |
| Tertiary (commerce, restoration, hotels and restaurants, tourism, transport, communications) | €303,091.10 |
| Financial activities and real estate | €356,600.45 |
| Other activities (e.g. R&D) | €279,924.50 |
| VAT and other forms of taxes | €158,817.00 |
| GDP (PPP) of Italy | €1,475,402.97 |
| Year | Image | Laureate | Born | Died | Field | Rationale |
|---|---|---|---|---|---|---|
| 1985 |  | Franco Modigliani | 18 June 1918 inRome since 1946 also American citizen[109] | 25 September 2003 inCambridge,USA | Economics | "for his pioneering analyses ofsaving and offinancial markets"[110] |
This article incorporatespublic domain material fromThe World Factbook.CIA.
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| Development | ||
| Events |
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| See also | ||
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 Historic currency and coinage of Italy | ||
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| Overview |  | |
| Ancient | ||
| Medieval | ||
| Modern | ||
| Contemporary | ||
| History |
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