May 29, 2011

Italy in Stop Motion

There is a weird debate in Italy about our income and how many people are poor, are becoming poor or are at risk of becoming poor...
Istat presented its last annual report, which of course is not so entusiastic about Italian position. Then the minister Giulio Tremonti said he doesn't trust those data and that Italian economy is not that bad (apparently he has a private secret data source), the media reported wrong statistics etc.
In this post I am trying to gather some material and look at some facts.

First of all, I think that a minister saying to distrust the national statistical instute might sound like an undue influence. Enrico Giovannini (president of Istat), in the Istat Report and Paolo Manasse, in his blog, would probably agree since they write respectively:
"Per garantire l’attendibilità dei dati e l’indipendenza di chi li produce si impone un deciso rafforzamento degli istituti nazionali di statistica, per metterli al riparo da ingerenze di carattere politico."
"Ma se Giovannini è preoccupato dell'indipendenza dell'informazione statistica da ingerenze politiche in Italia dovremmo esserlo tutti."

But this is not the subject of this post, so let's look at some data. I will report some graphs that I think don't need any special comment (more details here).

First, yes it's true, crisis apart, Italy has always been growing (nothing new here), the problem is that its growth has been more or less steadly slowing down since 80s and in the last years before the crisis we were basically just keeping our income stable. This is not very good for Italy itself and for those italians who would like to improve their lifes, but this is not good at all with respect to what other countries have been doing in the same time: in relative terms Italy is lagging behind.
Notice that the graph wants to show the long run trend (it takes 10 year moving averages) so the effect if the 2009 financial crisis is smoothed out.
The effect of the crisis has been a negative growth rate, that is a reduction of our income: indeed we are generally poorer. The following figure shows the decline in income for major european countries: Italian GDP fell more than others and it did not rise as fast. Apparently we did perform worse than others during the crisis.
Finally a rough evidence of what is one of the main problems of the Italian economy: low productivity - high labour costs.
And I would finish with the words of Edward Hugh:
So, during the first decade of the Euro the Italians paid themselves more for producing virtually what they were producing at the start of the century. Naturally this is not sustainable.

I stop here since I think there is enough stuff to get an idea and I don't have time to look for other things.

Now, I wonder: how likely is it that the figures reported by Istat are wrong? Actually they look quite in line with the big picture: I am seriously worried that Istat got it right, unfortunately.

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