Changes

Italy's economic growth averaged only 0.66% for the five years ending in 2005; 2006 GDP growth reached 1.9%, largely due to export growth to the Euro zone area.

Italy's economic growth averaged only 0.66% for the five years ending in 2005; 2006 GDP growth reached 1.9%, largely due to export growth to the Euro zone area.

Italy continues to grapple with excessive budget deficits and high public debt--4.3% and 108% of GDP expected for 2006, respectively. Italy joined the European Monetary Union in 1998 by signing the Stability and Growth Pact, and as a condition of this Euro zone membership, Italy must keep its budget deficit beneath a 3% ceiling. In June 2006, the European Commission warned Italy it had to bring the deficit down to that level by 2007. The budget passed in December 2006 raised sufficient revenues to make that target, even though the budget was derided by many as having no stimulus for growth.

Italy continues to grapple with budget deficits and high public debt--2.6% and 105.9% of GDP for 2008, respectively. Italy joined the European Monetary Union in 1998 by signing the Stability and Growth Pact, and as a condition of this Euro zone membership, Italy must keep its budget deficit beneath a 3% ceiling. The Italian Government has found it difficult to bring the budget deficit down to a level that would allow a rapid decrease of that debt. The worsening of the economic situation is expected to jeopardize this effort. The deficit is expected to grow well above the 3% ceiling in 2009 and 2010.

 

Italy's economic growth averaged only 0.8% in the period 2001-2008; 2008 GDP decreased 1.0%, largely due to the global economic crisis and its impact on exports and domestic demand. GDP is expected to contract further, with a huge decrease in 2009 (ranging from 2% to 3%) as the Euro zone and world economies slow.

 

Italy's closest trade ties are with the other countries of the European Union, with whom it conducts about 60.1% of its total trade (2007 data). Its largest EU trade partners are Germany (12.9%), France (11.4%), and the United Kingdom (5.8%). Italy continues to grapple with the effects of globalization, where China has undersold the Italian lower-end industrial product sector.

 

The Italian economy is also affected by a large underground economy--worth some 27% of its GDP. This production is not subject, of course, to taxation and thus remains a source of lost revenue to the local and central government.

*GDP (purchasing power parity, 2007 est.): $1.8 trillion.

*GDP (purchasing power parity, 2007 est.): $1.8 trillion.

*GDP per capita (purchasing power parity, 2007 est.): $31,000.  

*GDP per capita (purchasing power parity, 2007 est.): $31,000.  

====Agriculture====

====Agriculture====

Italy's agriculture is typical of the division between the agricultures of the northern and southern countries of the European Union. The northern part of Italy produces primarily grains, sugarbeets, soybeans, meat, and dairy products, while the south specializes in fruits, vegetables, olive oil, wine, and durum wheat. Even though much of its mountainous terrain is unsuitable for farming, Italy has a large work force (1.4 million) employed in farming. Most farms are small, with the average size being only seven hectares.  

Italy's agriculture is typical of the division between the agricultures of the northern and southern countries of the European Union. The northern part of Italy produces primarily grains, sugarbeets, soybeans, meat, and dairy products, while the south specializes in fruits, vegetables, olive oil, wine, and durum wheat. Even though much of its mountainous terrain is unsuitable for farming, Italy has a large work force (1.4 million) employed in farming. Most farms are small, with the average size being only seven hectares.

==History==

==History==