In 2017, Spanish GDP per capita at purchasing power parity managed to surpass Italy’s one for the first time since 1998, as follows from a report issued by the International Monetary Fund. According to IMF forecasts, for five years the Spanish indicator will account for 7%, which is higher than Italian, although ten years ago Italy was ahead by 10%. Moreover, the fund experts predict that by 2023 in this regard Italy will be beaten by such countries as Slovakia and the Czech Republic.
Economic surge in Spain is on a more positive and convincing trajectory than in Italy since 2011, so it’s quite natural, as some market experts pointed out.
Stagnation in the Italian economy has become one of the key 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 opposing political forces is increasing.
Italy’s huge public debt, in relation to GDP second only to Greece, is considered to be one of the main risks for the euro zone in general. As some market experts point out, this situation will continue if the Italian authorities don’t get down to structural reforms.
At the same time, Spain has been increasing GDP faster since 2015 than Germany, France and the United Kingdom, although the Spanish economy is still just 2% higher than in 2007.
According to experts, Spain has a number of structural advantages over Italy, including the younger population. However, the country also more effectively invested in public funds, especially in infrastructure, and demonstrated greater openness to innovation and foreign investment.
In the late 1990s, Italy, the eurozone’s number three economy, managed to outperform Spain in terms of GDP twice, and currently – by 50%. Compared to 2000, the Italian economy increased only slightly, while the main eurozone countries surged by 25%, and Spain came up with a 35% leap.