Italy' economy Research Paper Example | Topics and Well Written Essays - 500 words

Italy' economy - Research Paper Example The economic crisis of 2007-2011 had a negative impact to Italy’s economy. During this crisis, the economic growth went down by 6.74%. This left Italy in a huge budget deficit. Italian debt rating was quite poor by 2011 attributed to the government’s inability to make effective decisions on national issues. However, this changed over that period when the government adopted austerity measures that led to a budget deficit of only 1.5% in 2011. According to the International Monetary Fund, measured by nominal gross domestic product, Italy’s economy is the seventh largest in the world and fourth largest in Europe preceded by Germany, France and United Kingdom (OECD 127). This is despite its late industrialization and the current economic growth being almost stagnant. Most economic growth has been contributed by industrialization, which developed rapidly in the 1950’s. There is also practice of agriculture, which contributes about 2% of its growth domestic product, and tourism is the most important industry (Rodgers & Simon 134). Industries in Italy are diversified ranging and mostly based on the North in Milan, Turin and Genoa. Over half of the labor force is employed in the manufacturing industry that deals with chemicals, food, clothing, footwear, motor vehicles and ceramics among others OECD 34). The rest are employed in agriculture that deals in livestock like goats, cattle sheep and pigs together with plants like soybean, grapes, potatoes and sugar beets. Most of these industries were state owned but recently, the trend is changing to privatization. Most scholars and analysts suggest that Italy’s economy should have been above other countries like China or even Japan. Since this is not the case, political instabilities and the problems discussed above in the history of the economy as discussed are some of