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Italy Economic Snapshot

01.04.2019 Economic Survey of Italy

Italy continues to suffer from long-standing social and economic problems. Italy's GDP per capita is at the same level as 20 years ago and well below its pre-crisis peak.

GDP growth has slowed and is projected to contract by 0.2% in 2019 and expand by 0.5% in 2020. Expansionary fiscal policy and low growth will push the general government budget deficit to 2.5% of GDP in 2019 from 2.1% in 2018.

Though the employment rate has risen, it is still one of the lowest among OECD countries, especially for women. Productivity growth has been sluggish or negative for the past 25 years.

Absolute poverty rates rose during the crisis and remain high, especially for the young. Increasing productivity growth is key to raising living standards and to offsetting the large negative effect of demographics and a shrinking labour force.

In-work benefits and a moderate guaranteed income scheme would boost employment and reduce poverty. A key part of making growth strong and more inclusive involves increasing formal employment.

More effective regional development policies and strengthening capacity at the local level would help to narrow the regional divide. Rationalising and improving coordination among the bodies involved in regional development policies by strengthening the role and expertise of central-government bodies would make regional policies more effective.

Italy continues to suffer from long-standing social and economic problems. Italy's GDP per capita is at the same level as 20 years ago and well below its pre-crisis peak.

GDP growth has slowed and is projected to contract by 0.2% in 2019 and expand by 0.5% in 2020. Expansionary fiscal policy and low growth will push the general government budget deficit to 2.5% of GDP in 2019 from 2.1% in 2018.

Though the employment rate has risen, it is still one of the lowest among OECD countries, especially for women. Productivity growth has been sluggish or negative for the past 25 years.

Absolute poverty rates rose during the crisis and remain high, especially for the young. Increasing productivity growth is key to raising living standards and to offsetting the large negative effect of demographics and a shrinking labour force.

In-work benefits and a moderate guaranteed income scheme would boost employment and reduce poverty. A key part of making growth strong and more inclusive involves increasing formal employment.

More effective regional development policies and strengthening capacity at the local level would help to narrow the regional divide. Rationalising and improving coordination among the bodies involved in regional development policies by strengthening the role and expertise of central-government bodies would make regional policies more effective.

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Executive Summary