Almost two decades after the creation of the euro single currency, Italians are proving to be the big losers among the 19 member countries.
Gross domestic product per capita in real terms shrank 0.4% in the last 18 years, according to Bloomberg calculations based on data from the European Union statistics office up to 2015 and estimates for 2016. While Italy’s economy expanded 6.2% since 1998, its population increased by 6.6% over the period—thus accounting for the per-head drop.
“The comparison with other countries clearly shows that the Italian economy has expanded at too-slow a pace over the period,” said Loredana Federico, an economist at UniCredit Bank AG in Milan. “It will be very difficult for Italy to close, in the years to come, the gap with other economies that already returned to the pre-crisis level or even surpassed it.”
Eleven members of the EU introduced the euro as an accounting currency in January 1999; they were later joined by Greece. The actual notes and coins were introduced in January 2002, and expansion of the zone has since continued, with Lithuania becoming the 19th member in 2015.
Italy’s per-capita GDP has fared even worse than Greece, which was severely hit by the financial crisis. The value of all goods and services produced in that country rose in the last 18 years by 4% on an individual basis, Bloomberg calculations show.
In Germany, the euro region’s largest economy, per-capita output rose by 26.1% since 1998. That makes the citizens of Chancellor Angela Merkel’s nation the winners among all of the bloc’s main economies.
At this time last year, the International Monetary Fund reported disappointing global GDP growth of 3.1% in 2015, and promised that growth would increase in 2016 and 2017. But that expectation was unrealistic. And, sure enough, in 2016, it is estimated that global GDP again grew by only 3.1%, while world trade growth slowed substantially, from 2.7% to an anemic 1.9%. These figures describe a troubled world economy.
And yet the IMF is again forecasting that global GDP growth will significantly improve over the next two years, and that world trade growth will double. The IMF attributes much of the expected improvement in the global economy, especially in 2017, to stronger GDP growth in the United States. This optimism about the US economy is based on positive business - and consumer-confidence indicators and rising stock prices, in anticipation of fiscal stimulus and deregulation.
