The Strategist

IMF: Spanish have become richer than Italians

04/24/2018 - 14:53

Spanish GDP per capita in 2017, at purchasing power parity, surpassed that in Italy for the first time since 1998, states a report by the International Monetary Fund (IMF).

According to IMF forecasts, in five years the Spanish indicator will be 7% higher than Italian, although ten years ago Italy was ahead by 10%. Moreover, the fund experts predict that such countries as Slovakia and the Czech Republic will be beat Italy by 2023.

"Economic growth in Spain is on a more positive and convincing trajectory than in Italy since at least 2011, so this should be expected," says Professor Carlo Alberto Carnevale Maffè of the School of Management at the University of Bocconi in Milan.

Stagnation in the Italian economy has become one of the main reasons for political contradictions, as Italians lose faith in the ability of traditional parties to return the country to growth and provide the population with jobs, writes the Financial Times. Therefore, the popularity of populist and opposition political forces is increasing.

Italy's huge public debt, in relation to GDP second only to Greece, is considered one of the main risks for the euro area as a whole. According to senior economist KBC, Lieven Noppe, this situation will continue if the Italian government does not take a course on structural reforms. 

However, Spain has been increasing GDP faster since 2015 than Germany, France and the United Kingdom, but the Spanish economy is still only 2% higher than in 2007.

According to experts, Spain has a number of structural advantages over Italy, including the younger population. However, the country has also more effectively invested public funds, especially in infrastructure, and demonstrated greater openness to innovation and foreign investment.

In the late 1990s, Italy, the eurozone's third-largest economy, outpaced Spain in terms of GDP twice, and now - by 50%. Compared to 2000, the Italian economy increased only slightly, while the main eurozone countries grew by 25%, and Spain showed an increase of 35%.


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