(Finance) – The Italian labor productivity has worsened over the past 20 years, remaining consistently below the eurozone average both during periods of economic expansion and contraction. Furthermore, productivity growth has declined since the second half of the 1990s, when it was close to 1%, to stagnate on average around 0% since 2010. This is highlighted by an analysis by Scope Ratings, according to which these data they question the government’s ability to achieve its goal implied average productivity growth of 1.4% for the period 2025-2050, which also supports the other medium-term growth targets.
“Achieving the government’s projected long-term productivity growth for 2025-50 of around 1.4%, which underlies its medium to long-term pension and health projections, would require a persistent increase in productivity between 1.2 and 1.4 percentage points, on average, over the next 30 years for all regions; a level not observed since the 1990s“notes Alvise Lennkh-Yunus, deputy head of sovereign ratings at Scope.
“Although the Next Generation EU funds of 192 billion euros in the period 2021-2026 could provide an important boost, together with the European structural and cohesion funds of around 43 billion euros, the scale of the challenge and the political commitment needed to sustain the momentum of reforms after next year’s elections remain worrying“, adds the analyst of the European rating agency.
Italy’s productivity growth rates have not exceeded 1% for five years since the 1990s and have averaged 0.84 percentage points lower than those in the euro area over the past 20 years. At the same time, the productivity varies significantly throughout Italy. National and regional levels of per capita GDP were higher in 1995 than in 2019, with labor productivity in the north remaining the highest and with the gap with the rest of Italy higher today than it was 20 years ago.
THE north-south and center-north productivity gaps they have continued to expand since 1995. By contrast, the productivity levels of the central and southern regions are converging, mainly due to the fact that the center has become relatively less productive rather than the south having caught up.
“The north-south gap in GDP per person employed went from 17.5 euros in 1995 to 20.1 euros in 2019, while the central-north gap also increased from 5.1 euros to 8.2 euros – says Giulia Branz, Scope analyst – Worryingly, this The widening gap is not due to the fact that the north has improved its productivity levelsbut rather to the decline in productivity in the rest of Italy “.