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Overview of the Economy

According to the OECD Italy's Gross Domestic Product (GDP at PPP values) is the sixth largest in the World and accounts for 6.7 and 15.7 total output, respectively.
Per capita income, while 35.7 per cent lower than in US, is even with the average European Union level.
Italy has a long established tradition of promoting and thriving on international trade.
Accordingly, Italy can be defined as an open economy to international trade: Italy's share of G7 foreign trade is equal to 8.9 per cent, well above its GDP share.

In the last 50 years, the Italian economy has witnessed a remarkable growth thanks to a strong entrepreneurial bias combined with liberal trade policies.
Between 1950 and 1963 the GDP grew by an average of 5.9 per cent per year, reaching a peak of 8.3 per cent in 1961.
The years from 1958 and 1963 are known as "il miracolo economico" (the economic miracle).
The growth in industrial output peaked at over 10 per cent per year during that period.
The country experienced full employment and high level of investments out of GDP: e.g. in 1963 a stunning 27 per cent.

After 1963 the economy slowed down at a more normal pace and eventually experienced a downturn after 1973 in concomitance with the first oil shock.
The oil shocks of the 70’s hit Italy's economy particularly hard, given the country's reliance on foreign sources for its energy supply. A period of high inflation ensued, and in the 80’s the industrial complex entered into a new phase of restructuring and reorganizations in order to cope with the challenges posed by the new international environment.

The economic policy in the 90’s set out to tackle the fiscal imbalances that had developed over the previous years.
More emphasis was put on the private sector as the primary engine to enhance growth: broad arrays of deregulation measures were enacted, and a massive program of privatization of state-owned enterprises and banks was implemented.

The corrective actions undertaken in order to reestablish a sound fiscal policy, a stable currency, and low interest rates allowed Italy to join the new European Monetary Union (EMU) and its common currency, the Euro, as a founding member, on January 1, 1999.
From that moment to the end of 2001 the countries that had joined the EMU adopted the Euro as a virtual currency for their transactions and as a unit of account. The Euro bills start circulating on January 1, 2002.

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