The economy of Italy is the 3rd-largest national economy in the eurozone, the 8th-largest by nominal GDP in the world, and the 12th-largest by GDP (PPP). Italy has a major advanced economy, and is a founding member of the European Union, the Eurozone, the OECD, the G7 and the G20. Italy is the eighth largest exporter in the world with $514 billion exported in 2016. Its closest trade ties are with the other countries of the European Union, with whom it conducts about 59% of its total trade. The largest trading partners, in order of market share, are Germany (12.6%), France (11.1%), the United States (6.8%), Switzerland (5.7%), the United Kingdom (4.7%), and Spain (4.4%).
In the post-World War II period, Italy was transformed from an agricultural based economy which had been severely affected by the consequences of the World Wars, into one of the world’s most advanced nations and a leading country in world trade and exports. According to the Human Development Index, the country enjoys a very high standard of living, and has the world’s 8th highest quality of life according to The Economist. Italy owns the world’s third-largest gold reserve, and is the third net contributor to the budget of the European Union. Furthermore, the advanced country private wealth is one of the largest in the world.
Italy is a large manufacturer (overall the second in EU behind Germany) and exporter of a significant variety of products including machinery, vehicles, pharmaceuticals, furniture, food, clothing, and robots. Italy has therefore a significant trade surplus. The country is also well known for its influential and innovative business economic sector, an industrious and competitive agricultural sector (Italy is the world’s largest wine producer), and for its creative and high-quality automobile, naval, industrial, appliance and fashion design. Italy is the largest hub for luxury goods in Europe and the third luxury hub globally.
Despite these important achievements, the country’s economy today suffers from structural and non-structural problems. Annual growth rates have often been below the EU average with Italy being hit particularly hard by the late-2000s recession. Massive government spending from the 1980s onwards has produced a severe rise in public debt. In addition, Italian living standards have a considerable North–South divide: the average GDP per capita in Northern and Central Italy significantly exceeds the EU average, while some regions and provinces in Southern Italy are dramatically below. In recent years, Italy’s GDP per capita growth slowly caught-up with the Eurozone average while its employment rate still lags behind; however, economists dispute the official figures because of the large number of informal jobs (estimated between 10% and 20% of the labour force) that lift the inactivity or unemployment rates.