Italy's Economic Ascendancy Under Meloni Shifts Focus From France
Italy's economic gains under Meloni signify a notable shift compared to France's performance.
Key Points
- • Italy's GDP per capita is now equal to France's, a significant improvement from five years ago.
- • In 2022, Italy's GDP grew by 4.7%, surpassing France's 2.6% growth.
- • Italy is now the fourth-largest exporter globally, surpassing France.
- • The Italian budget deficit has decreased significantly from 7.2% to 3.4% since 2023.
Amid a backdrop of previously strained relations, Italian Prime Minister Giorgia Meloni and French President Emmanuel Macron are scheduled to discuss pressing economic matters. In recent developments, Italy's economy has shown remarkable improvements compared to France's. Notably, Italy's GDP per capita has rebounded to match France's—an impressive recovery since it was 10% lower five years ago. In 2022, Italy's GDP surged by 4.7%, significantly outpacing France's growth of only 2.6%.
Italy has also emerged as the world’s fourth-largest exporter, surpassing France, largely due to its robust network of family-owned businesses that have effectively retained competitiveness. Additionally, fiscal management under Meloni has yielded a dramatic reduction in the budget deficit, which has halved from 7.2% of GDP in 2023 to 3.4% in 2024. By contrast, France's deficit stands at 5.8%. The Italian government's scrapping of the costly Superbonus tax incentive has been pivotal in this turnaround, alleviating a public financial burden exceeding 100 billion euros.
Despite these advancements, challenges loom, particularly as Italy faces potential impact from U.S. tariffs on exports and questions surrounding sustainable growth post-European recovery fund investments, due to conclude in 2026. Experts warn that Italy's future economic health depends heavily on implementing significant reforms to prevent vulnerabilities from arising as these funds reduce. The International Monetary Fund (IMF) has predicted a modest growth rate of just 0.4% for Italy in the upcoming year, highlighting potential concerns amid ongoing trade tensions and demographic decline.