After a long contraction, growth is expected to turn positive in 2015 but remains well below the EU average. Inflation is projected to turn negative due to the fall in oil prices. Unemployment remains historically high and domestic demand is weak. Increasing global demand, a lower euro and falling oil prices could support economic growth in the future. The current account surplus is expected to strengthen slightly. The government deficit is set to reach 3% of GDP in 2014 and to decrease in 2015 and 2016, while the public debt-to-GDP ratio is set to increase further.
Italy is experiencing excessive macroeconomic imbalances, which require decisive policy action and specific monitoring. In a context of protracted weak growth and persistently low productivity, risks stemming from the very high level of public debt and the weakness of both cost and non-cost competitiveness have significantly increased. The need for action so as to reduce the risk of adverse effects on the Italian economy and, given its size, of negative spillovers to the economic and monetary union, is particularly important.
Read a complete analysis of Italy's economy in the country report 2015 [2 MB]
2015 recommendations in brief
The Commission has made six country specific recommendations to Italy to help it improve its economic performance. These are in the areas of: public finances and taxation; infrastructure investment and EU funds; public administration and justice system; financial sector; labour market, wage-setting and education; simplification and competition.