Economy of Italy
The Milan Stock Exchange.
Italy has a capitalist economy with high gross domestic product (GDP) per capita and developed infrastructure. According to the International Monetary Fund, in 2008 Italy was the seventh-largest economy in the world and the fourth-largest in Europe. Italy is member of the Group of Eight (G8) industrialized nations, the European Union and the OECD.
In the post-war period, Italy was transformed from a weak, agricultural based economy which had been severely affected by the consequences of World War II, into one of the world's most industrialized nations, and a leading country in world trade and exports. In 1987, the Italian economy temporarily overtook the British economy, by GDP (nominal), an event known as 'il sorpasso' and in 1991 Italy became for a while the world's fourth-largest economic power. It may have briefly overtaken France as well. This was due to a rapid increase in public expenditure in order to boost economic growth, which eventually resulted in unsustainable levels of public debt. In 1980 the public debt amounted to only 56.9 per cent of the GDP. By 1994 it had reached the record level of 121.8% per cent of GDP. This was over twice the ceiling fixed by the Maastricht agreement and the highest level of indebtedness of any member country of the European Union. The result since then has been very low levels of growth, even compared to other European countries. Between 2000 and 2007 it averaged 1.5%, against the 2.4% of the European Union as a whole. In 2009 the accumulated public debt stood at 116% of GDP. Italy has now slipped to tenth (as ranked by the IMF and World Bank) in the list of countries by GDP on the basis of purchasing power parity.
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