CURRENT MACROECONOMIC SITUATION AND FORECAST
In view of current economic situation in European Union I choose for my seminar work Italy, which is one of the most affected countries by financial crisis. Coupled with three more southern European states that are known by term PIGS. First time became this unflattering term in 1990s as name of countries with similar economic environments and it originally referred to the economies of Portugal, Italy, Greece and Spain. The acronym became popular again along with a financial crisis when the economies of Portugal, Ireland, Italy, Greece and Spain were seen as especially vulnerable due to high or rising government debt levels and high government deficits relative to annual GDP.
Before begin talking about macroeconomics situation of Italy, I would like to mention some basic concepts which will be analyzed in following text.
First of all, it is important to explain what macroeconomics is. Macroeconomics includes study of the behaviour of the whole economies or economic systems. It is concerned primarily with the forecasting of national income, through the analysis of major economic factors that show predictable patterns and trends, and of their influence on one another. These factors include: *
GDP (Gross Domestic Product) - the monetary value of all goods and services produced within a country's borders in a specific time period. GDP is usually calculated on an annual basis. It includes all of private and public consumption, government outlays, investments and exports less imports that occur within a defined territory. *
GNP (Gross National Product) - the measure of a country's economic performance, all goods and services that its citizens produced and whether they produced these items within its borders. *
GNI (Gross National Income) - is GDP plus net receipts from abroad of wages and salaries and of property income. *
Unemployment rate (in %) – the percentage of workers who are looking for work and have not yet found work. *
Inflation rate (in %) - the percentage change in the price level measured against a standard level of purchasing power from one year to the next. *
Interest rate (in %) - the percentage of the total amount loaned. Interest rate is the yearly price charged by a lender to a borrower in order for the borrower to obtain a loan.
1 Country profile
Italy became a state in 1861 when the city-states of the peninsula were united under King Victor Emmanuel. An era of parliamentary government came to a close in the early 1920s when Benito Mussoliny established a Fascist dictatorship. His disastrous alliance with Nazi Germany led to Italy's defeat in World War II. A democratic republic replaced the monarchy in 1946 and economic revival followed.
In 1949 Italy became a charter member of NATO. The Marshall Plan helped to revive the Italian economy which, until the late 1960s, enjoyed a period of sustained economic growth commonly called the "Economic Miracle". In 1957, Italy was a founding member of the European Economic Community, which became the European Union in 1993.
Italy was one of the six countries which signed the 1951 Paris Treaty setting Europe off on the path to integration. It has been verily at the heart of Europe ever since, although the government led by media magnate Silvio Berlusconi in the early 2000s adopted a more Eurosceptic stance. Because of this and also more other circumstances, Italy fell into not too sugary economic situation. During the 1990s and the 2000s, centre-right (dominated by Silvio Berlusconi) and centre-left coalitions alternatively governed the country, which entered a prolonged period of economic stagnation.
Italy is the fourth largest European economy and for long enjoyed one of the highest per capita incomes in Europe, despite the decline in traditional industries such as textiles and car manufacturing as a result of globalisation. Nevertheless, it...
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