Italy – Monthly News Digest

Italy – Monthly News Digest
  • Gaining democratic legitimacy by weakening parliamentary democracy The left's risky wager
  • A budget with no ambition or change
  • The underground economy shrank in 2017
  • Retail trade still low in August
  • Household savings up again in Q2, corporate profit margins down
  • Unemployment drops again in August
  • The 2020 budget tries to have it both ways

In resume

Gaining democratic legitimacy by weakening parliamentary democracy The left's risky wager. A budget with no ambition or change. The underground economy shrank in 2017. Retail trade still low in August. Household savings up again in Q2, corporate profit margins down. Unemployment drops again in August. The 2020 budget tries to have it both ways.

Italy – Monthly News Digest

The Italian underground economy shrank as a share of GDP according to the latest ISTAT estimates: 12.1% in 2017, compared to 12.2% in 2016, and has declined 0.9% from its 13% peak in 2014. In terms of annual change, it grew 1.5% to €211bn. As a percentage of GDP, understatement and illegal business held steady at 5.6% and 1.1%, while undeclared work dropped 0.1% to 4.5%. The make-up of the underground economy has not significantly changed over the past four years. Understated business accounted for 46.1% in 2017 (+0.3% compared to 2016), followed by undeclared labour at 37.3% in 2017, down 0.5% compared to 2016 (undeclared labour has systematically shrunk as a share of the hidden economy since 2014, when it accounted for 38.2% of the hidden economy's added value). On the other hand, the share taken up by illegal activities since 2014 has grown 0.3% compared to 2016, to 9% in 2017.

Paola MONPERRUS-VERONI, Economist