Welcome back dear loyal readers of Invest In The Stock, we are always very happy and honored to have you here with us and more numerous. In today’s article we will talk about finance, specifically, we will deal with the Italian GDP 2023. Together we will try to understand what it is, how it is calculated, and we will also see its current trend and future forecasts.
What is GDP?
First of all, let’s see what GDP is, an acronym for Gross Domestic Product.
Basically, it is the value of products and services that are produced in a sovereign state, considering a specific period of time.
This value is the result of exchange processes, therefore from the sale and purchase of goods, products and services, excluding those made by subjects intended for self-consumption and those rendered free of charge.
In the total calculation, the nationality of those who produce the good is not calculated, but rather the geographical area in which it is produced.
Real GDP example
Let’s take an explanatory example: a car manufactured in Italy by a foreign company enters the Italian GDP by region.
Conversely, an Italian footwear company that markets in France will be counted in the transalpine GDP.
Moreover, all amortizations are included in the GDP and in the public debt.
Therefore, the depreciation of all the technological devices and technical apparatuses that are used to produce the goods, which obviously depreciate over time and must be continuously replaced and maintained.
How is the GDP of a country calculated?
Let’s now look at how the GDP of a country is measured.
Basically, there are three different methods for calculating GDP:
- GDP expenditure method
- Value added method
- GDP income method
Let’s analyze them specifically.
Expense method
Let’s start with the expenditure method to calculate the Italian GDP for 2023.
This system is based on the calculation of purchases of products and services made in the territory.
It begins with the reporting of consumption produced by households through durable goods, consumables and services.
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After that, all the investments of the companies must be added, in capital goods and real estate; and finally public expenditure, which refers to the expenditure made by the State, local authorities and public administrations, lastly including net exports.
Value added method
The second type of Italian GDP and public debt is the value added method.
This calculation system is based on the entire supply ecosystem and on economic entities, both goods and services.
Through this system of calculation of the Gross Domestic Product all the values of the production steps, suitable for the production of the goods, are added.
Therefore, the same result is obtained as with the expenditure method.
Precisely because this method is based on the idea that in order to have the final phase of the production process it is essential to adopt a series of intermediate processes, which in turn add value to the reference asset.
GDP income method
The last type of how the GDP of a country is calculated is that based on incomes.
This option is based on the labor and capital used to create a good or provide a service.
Through this method, the production contributions must be subtracted from the sum of wages, profits and taxes on production and sales, then from the total calculation.
It must be said that in recent times, the Italian government has decided to formulate a much more defined calculation, also including the so-called underground economy, therefore undeclared work, with a fairly precise estimate.
Italian GDP trend 2023
Now let’s see the trend of the Italian GDP and the forecasts for the future.
An analysis of the sector’s graphs tells us that in the second quarter of last year, the Italian GDP by region increased by about double, i.e., compared to forecasts, significantly exceeding expectations.
Unfortunately, however, the short-term scenario will not be the best.
In fact, Italy’s GDP is expected to decrease in the winter period, due to the high inflation in conjunction with the increase in interest rates and the geopolitical situation, which has a negative impact.
Real PIB and inflation
Addressing the inflation of prices to the consumer, this last one will be kept very high also in the next 2023, this should be in particular the energy components and the food sector.
Even the basic assets will tend to have an influence each more on the inflation rate and on the Italian PIB and the public deuda.
Tax measures
In addition, the implantation of fiscal measures designed and studied for:
- Apoyar los ingresos de familias, personas y empresas
- Hold the increase in electricity costs during the 2022-2023 period
- Medidas that could also be confirmed in the future.
Therefore, also calculating the cyclic deceleration, this will contribute to reduce the ratio public debt/PIB.
Relationship between the public body and the PIB
Certainly one of the principal mediums that use the Stados to analyze and verify the financial situation, and in essence, of its economic status, is the report between the deuda and PIB Italia 2023.
This evaluation of the índice de deuda public is done like a porcentaje.
Following the Pact of Stability, in the so-called Eurozone, it will cover 60%, to ensure the financial and economic serenity of the whole area.
Situation of the PIB at European level
We see the situation at European level.
In 2022, in the Eurozone, a decline in the ratio of the public population/PIB was produced, which was produced thanks to the increase in the PIB, which exceeded the increase in the public population:
Of 94.2% to 95.2% in the first quarter of the year
Consequently, these decelerations are mainly due to the repute of the PIB; while the deuda, in absolute value, continued to increase according to the data published by Eurostat.
Let’s analyze the ratios of the European GDP, the main differences between the public and the PIB, considering the second quarter of 2022, pertaining to these countries in the following order:
- Greece (182.1%)
- Italy (150.2%)
- Portugal (123.4%)
- Spain (116.1%)
- France (113.1%)
- Belgian (108.3%)
In the rearguard are found Estonia (16.7%), Bulgaria (21.3%) and Luxembourg (25.4%).
Well, dear friends of Invest in The Stock, thanks to our detailed article they have clearly understood which are the most predominant factors that influence the trend of the Italian PIB in 2023.
Invest In The Stock, The Editors
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