Italy

Victoria Patrico

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World Ranking: 80 Overall Score: 61.7

Population:

Italy

  • 59.7 million

USA

  • 316.4 million

GDP (PPP):

ITALY

  • $1.8 trillion
  • -1.9% growth
  • -1.5% 5-year compound annual growth
  • $30,289 per capita

USA

  • $16.8 trillion
  • 1.9% growth
  • 1.2% 5-year compound annual growth
  • $53,101 per capita
  • Unemployment:
  • ITALY

    12.2%

    USA

    7.5%

  • Inflation (CPI):
  • ITALY

    1.3%

    USA

    1.5%

  • FDI Inflow:

    ITALY

  • $16.5 billion

    USA

    $187.5 billion

    7 Major Sources of Economic Progress

    Legal System

    The former prime minister was expelled due to tax fraud. The 2014 new government pledged to no corruption. The legal system remains vulnerable to political interference. Property rights remain secure. Contracts remain secure, although court procedures are slow. Protection of property is however below EU norms.
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    Competitive Markets

    EU members have about a 1.0 percent average tariff rate. Some non-tariff barriers exist the EU is open to external trade. Foreign and domestic investments are treated relatively equal under Italian law. The financial system, which are dominated by banks are vulnerable to state interference. There are about 700 banks. Nonperforming loans have increased a lot since 2007.

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    Limits on Government Regulation

    The top individual income tax rate is about 43%. The top corporate tax rate is about 27.5%. Other taxes include a value-added tax. Also the total tax burden equals 44.4% of domestic production. Government expenditures account for 50.6% of domestic output. Public debt remains high of GDP. Yet, sovereign financing concerns have abated.
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    An Efficent Capital Market

    There are about 700 banks. Although some non-tariff barriers exist, the EU is relatively open to external trade. Since 2007 nonperforming loans have increased. Foreign and domestic investments are generally treated equally under Italian law. EU members have a 1.0 percent average tariff rate. The financial system is dominated by banks. It remains vulnerable to state interference.
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    Monetary Stability

    Taxes include a value-added tax and an inheritance tax. The top individual income tax rate is 43 percent, and the top corporate tax rate is 27.5 percent. Total tax burden equals 44.4 percent of domestic production. But sovereign financing concerns have abated. Government expenditures account for 50.6 percent of domestic output. Public debt remains high, (133 percent of GDP)
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    Low Tax Rates

    Described as a point by GPD. An optimal level of governmental expenditures. The ideal levels vary. Depending on the level of development. This is because of the chronic budget deficits. Italy has a modest level of development. Due to government spending and fiscal freedom. It is one of the most serious drags on economic dynamistic.
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    Free Trade

    Business formation takes only five procedures. Burdensome licensing requirements require over three months on average.The labor market remains stagnant Which discouraging dynamic entrepreneurial growth. Monetary stability has been relatively well maintained. The government has reduced subsidies for renewable energy.

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    The expulsion of the 2013 minister Matteo Renzie. His expulsion after his tax fraud. The 2014 new government discusses the promise of no corruption and the growth and jobs in Italy.