Economics Spain vs. Italy
Aneta Chabibulina and Anna Kozlovits TEKO College by VIA University thaibm2a
Unemployment
% 25
20
15 Italy Spain
10
5
0 1999
2000
2002
2003
2004
2005
2006
2007
2008
2009
2010
Unemployment in Spain started to rise significantly from the middle of 2007, because of the recession in the world. Despite the slow rate of unemployment in Italy, the situation is balanced.
GDP per capita $40,000 $35,000 $30,000 $25,000 Italy
$20,000
Spain $15,000 $10,000 $5,000 $0,000 1999
2000
2002
2003
2004
2005
2006
2007
2008
2009
2010
This chart shows that Italian economy is well-controlled and balanced. In Spain the GDP per capita was increasing, but from the start of economical crisis in 2008 it went back to the level of year 2005. Although Spain’s unemployment rate is increasing, the GDP per capita is stabilized.
Inflation
% 4,5 4 3,5 3 2,5 2
Italy Spain
1,5 1 0,5 0 1999
2000
2002
2003
2004
2005
2006
2007
2008
2009
2010
-0,5 -1
The lower inflation rate leads to the higher unemployment, probably because the government cuts the public expenditures in order to pay back the debts. In both countries the inflation decreased drastically between 2008 and 2009.
Public Debt
% of GDP 140
120
100
80 Italy 60
Spain
40
20
0 2004
2005
2006
2007
2008
2009
2010
Italy has a higher public debt in comparison with Spain. From 2007 Spanish public debt is continuously growing.
Balance of Payment
Bln $ 140 120 100 80 60
Italy
40
Spain
20 0 1998
2000
2002
2003
2004
2005
2006
2007
2008
2009
2010
-20 -40 -60
Italy is import is almost equal to its export. From 2005 till 2008 Spain exporting much more than importing. In 2009 their export decreased until the level of 2005.
Gini Index (Income Distribution) 37 36 35 34 Italy
33
Spain 32 31 30 29 2000
2006
In 2006 both countries were at the same level of income distribution. The gap between citizens with high and low income was reduced from 2000 till 2006.
Gross Annual Income
$ 35000
30000
25000
20000 Italy Spain
15000
10000
5000
0 2000
2001
2002
2003
2005
2006
2009
In 2009 in both countries the gross annual income was very similar. In 2005 the Italians had much higher Gross Annual Income than Spanish.
Taxation system Italy
Spain
30% 27,50%
21% 18%
Corporate Income Tax
VAT
Corporate income tax in Spain is 2,5% higher than in Italy. VAT in Italy is 3% higher than is Spain.
Individual Income Tax Individual Income Tax in Italy 38%
23%
0 - 15,000
41%
43%
27%
15,001-28,000 28,001-55,00 55,001-75,000 75,001 and over
Individual Income Tax in Spain 37% 24%
Italy and Spain have differentiated individual income tax.
28%
43%
44%
45%
Philip Curves
%
4,5 4 3,5 3
Inflation
2,5 2
Spain
1,5
Linear (Spain)
1 0,5 0 -0,5
0
5
10
-1
15
20
25
%
The tendency of Spain and Italy: unemployment is increasing and the inflation rate is decreasing.
Unemployment
% 4
3,5 3 Inflation
2,5 2
Italy
1,5
Linear (Italy)
1 0,5 0 0
2
4
6
8
Unemployment
10
12
14 %
Inflation in Spain and Italy is similar, however unemployment in Spain is much higher than in Italy.
Philip Curves
Bln $ 140
Balance of payment
120 100 80 Spain
60
Linear (Spain)
40 20 0 10
0
100
200
300
400
500
Import
Bln $
The tendency of Spain and Italy: balance of payment and import is increasing.
Bln $ 5
Balance of payment
0 0
100
200
300
400
500
600 Bln $
-5 Italy Linear (Italy)
-10 -15 -20 -25
Import
Balance of payment and import in Spain is much higher than in Italy.
Conclusion In general the economy of Spain is less balanced than the Italian one. Today’s situation in both countries is difficult because Italy has a lot of debts and Spain has high level of unemployment. In both countries the government is cutting the public expenditures in order to pay back the debts. The world recession is impacting on both countries. Because of the low income distribution the export possibilities are limited. During the economic crisis Italy and Spain are getting less income from the tourism, which was one of their key income source.