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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.


Economics - Spain vs. Italy