In 2018, the Italian domestic product at market prices amounted to €1.753.949 million, up 1,7% on the previous year. In volume, GDP increased by 0,9%. This is the new Istat estimate for last year. The institute therefore revises the forecasts downwards from the previous +1% and above all certifies a clear slowdown compared to 2017, when the GDP had grown by 1,7%. The new figure is also lower than the government's estimates, which at the end of December indicated 2018% economic growth for 1.
“The growth of the economy - comments the National Institute of Statistics - continued for the fifth consecutive year, however marking a slowdown compared to 2017. The weakening of the dynamics resulted from a sharp reduction in the contribution of domestic demand, and in particular of the private consumption component”.
Domestic demand, in 2018, in fact grew by 3,4% of gross fixed investments and by 0,5% of national final consumption. As regards foreign flows, exports of goods and services increased by 1,9% and imports by 2,3%. Domestic demand contributed positively to GDP growth by 1 percentage point (+0,9 gross of the change in inventories) and net foreign demand negatively, by 0,1 points.
“The trend in exports – continues Istat – marked a deceleration and the contribution of net foreign demand to GDP became slightly negative. The expansion of added value, widespread in all the main sectors, was more marked in manufacturing and construction, less dynamic in services. Labor units increased at a more moderate pace than in 2017, while per capita wages recovered sharply. The net indebtedness of the public administrations recorded an improvement, while the tax burden remained stable”.
At the sectoral level, value added rose in volume:
- in construction (+1,7%),
- in industry in the strict sense (+1,8%),
- in agriculture, forestry and fishing (+0,9%)
- in service activities (+0,7%).
THE PUBLIC DEBT RISES, THE DEFICIT FALLS
in 2018 Italian public debt increased to 132,1% of GDP against 131,3% in 2017. Istat's calculation is based on the new estimates on gross domestic product and on data from the latest Bank of Italy public finance bulletin. Last December, the government had forecast for 2018 that the debt would amount to 131,7% of GDP.
Always in 2018 the deficit-to-GDP ratio fell to 2,1%, an improvement compared to 2,4% in 2017, which was also affected by the effects of the bailouts of banks in crisis. In December 2019, the Government had estimated a deficit of 1,9% of GDP for last year. That of 2018 is the lowest level since 2007, when the deficit stood at 1,5% of GDP.
STABLE TAX PRESSURE
In 2018, the overall tax burden - which includes direct, indirect, capital account and social security contributions in relation to GDP - was 42,2%, remaining at the same level as in 2017.
Italy's primary surplus (ie the deficit net of interest expenditure) improved, rising to 1,6% of GDP. Istat recalls that in 2017 the ratio was 1,4%.
EMPLOYMENT AND UNEMPLOYMENT
Istat also released the data on employment and unemployment for the month of January 2019, when the estimate of employed people grew compared to December (+0,1%, equal to +21 thousand units). The employment rate remained stable at 58,7%. The growth involves only men (+27 thousand) while there is a slight decrease in women (-6 thousand).
Broadening the analysis horizon, in the period between November 2018 and January 2019 employment recorded a slight decrease compared to the previous three months (-0,1%, equal to -19 thousand units), while on an annual basis the employment grew by 0,7%, (+160 units). The increase in employed persons was accompanied by a decrease in the unemployed (-5,0%, equal to -144 thousand units) and inactive people between the ages of 15 and 64 (-1,0%, -129 thousand).
