In 2019, the inflation rate in Italy stood at 0.6 percent. Between 2004 and 2019, the highest figure was recorded in 2008. When the financial crisis hit Italy, the inflation in the country reached 3.3 percent. The main way to measure inflation is to observe the movement of the Consumer Price Index (CPI). The CPI analyzes the changes in the prices of goods and services that households consume. Thus, an increase in CPI figures means a devaluation of the purchasing power in a given currency. In recent years, the CPI in Italy has increased. As of 2019, the value reached 102.9 against 100 in 2015.
The unemployment rate in Italy reached 9.1 percent in the first quarter of 2020, a decrease compared to previous years. On the other hand, the share of young unemployed people is three times higher. In February 2020, almost 30 percent of individuals aged 15 to 24 years were unemployed. Chronological data on youth unemployment rates reveal that between 2004 and 2007, the rate dropped by around 20 percent. The labor market crisis became more significant after 2008, when figures started to increase, amounting to 42.7 percent in 2013.
Italy is the ninth leading export country in the world. In 2018, the country registered an export value of approximately 547 billion U.S. dollars. Italy’s main trade partner is Germany, which accounted for 58 billion euros of Italian export value, followed by France and the United States. The extractive industry, electrical equipment, and metals are among the main export sectors. Normally, the industry of coke and refined petroleum is the fastest growing exporting sector. However, in May 2020 this industry experienced the largest decrease among the different sectors. Due to the COVID-19 pandemic, the export of coke and refined petroleum dropped by 65.5 percent compared to the previous year.
In addition to these national accounts, other factors that need to be taken into consideration are untaxed economic activities. The shadow economy in Italy is worth roughly 192 billion euros, showing an increase compared to past years. The majority of this value comes from false declaration and illicit work. More specifically, in 2017 the value of the shadow economy derived from false declaration amounted to 97 billion euros, while illicit work generated a value of 78.7 billion euros.
Since February 2020, the coronavirus (COVID-19) has started spreading rapidly in Italy. As a consequence of the rising number of cases, on March 9, the Italian government imposed a national lockdown to prevent the spread of the virus. These measures noticeably impacted the Italian society and economy. New forecasts considering different scenarios in the development of the economy have been published. According to a forecast from March 2020, the Italian GDP could drop by 6 percent in 2020, compared to the previous year. Additionally, the unemployment rate is estimated to rise during 2020. Indeed, the amount of hours worked is dropping, as many activities have been stopped. However, the Italian Prime Minister Giuseppe Conte announced several financial measures to help businesses through the national shutdown.