Some notes on growth
Third-quarter GDP data is released tomorrow (we only have provisional figures for now), and we'll have a better understanding of the current situation. In the meantime, I'll provide some useful data to help you understand the situation. Quarterly GDP in the three major European economies, taking the last quarter of 2022 (the one when the fasheesmo hit, so to speak) as a percentage, has so far moved as follows:
where the latest Italian data is provisional (tomorrow we will have the definitive one; the source of this data is Eurostat).
Let's say good but not very good, in the sense that obviously it would have been better to grow as much as France.
I think I can make a couple of educated guesses about what's driving France's growth. Current public spending certainly plays a role, but so does this fact:
The lower GDP growth in Italy is undoubtedly linked to our country's greater exposure to Germany, with a trade-to-GDP ratio that is more than one point lower.
So, German GDP declined, while Italian GDP increased. A grim detail: household consumption increased everywhere, even in Germany, where incomes were declining.
which, at first glance, would lead me to believe that household debt in Germany has increased (but the analysis would need to be done in more depth, for example by considering households' disposable income, etc.).
Are we deindustrializing?
This is the index of industrial production in the manufacturing sector, base 2020 = 100, for Italy and Germany:
and it is not very difficult to see that in Germany production has tended to grow over the last thirty years, while in Italy it has fallen (the fact that the indices coincide towards the end obviously means nothing other than that the base of the indices is conventionally set at 2020: what needs to be looked at in an index is the dynamics.
It's also pretty clear when things start to go wrong, and in fact, even in this case, fasheesmo has little to do with it. If we focus on the period from 2017 to today, things go like this:
And you can clearly see where the problem lies: after the COVID shock, Italy rebounded, while Germany didn't. If we zoom in, we see something similar:
The decline in the Italian industrial production index began at the time of LVI and all in all, fasheesmo (in short: us) managed to slow it down rather than accelerate it.
It is true that in Italy the weight of manufacturing on total added value has been decreasing since the 1990s:
In the mid-1990s, manufacturing accounted for 20% of the economy in both Germany and Italy; now, it still accounts for 20% in Germany and 16% in Italy, a decline of four percentage points. At #goofy12, our friend Münchau taught us to interpret this data not only, or not necessarily, as a disastrous deindustrialization of Italy, but perhaps as an equally disastrous bottleneck in the supply of services to the German economy: in other words, it's not so much our manufacturing sector that's undersized, but their service sector that is (you'll remember the anecdote of the son asking his father, "Dad, why doesn't my cell phone work?").
It goes without saying that, as always, the truth is likely somewhere in the middle, but whatever it is, it's certainly not hard to see when it happened, and here too, fasheesmo has little to do with it (just as it has little to do with the wage crisis, just as it has little to do with fiscal drag , in short: just as it has little to do with everything, or just as Berlusconi's sexual habits had nothing to do with the 2011 foreign debt crisis—something I told you from the left and I'll repeat without hesitation from the right!). Just look at how the gap between the manufacturing shares in Italy and Germany is moving:
This gap widened almost linearly between 1996 and 2011, then stopped there (and possibly closed slightly from 2022 to today, but it is too early to say whether this is a structural change).
You might ask: how can Italian GDP grow if industrial production declines? Because GDP also includes agriculture and services, and because the industrial production index is a short-term indicator based on the physical quantity of output, which is a relatively easy concept to measure at monthly intervals, but it isn't as economically sophisticated as value added, which measures net output by subtracting the volume of intermediate inputs from the volume of production (and therefore is affected by factors such as the structure of the production process and the costs of production inputs). Obviously, in the long run, the two measures are correlated, and in fact, if you take the series of value added in manufacturing expressed as an index, you find a profile similar to that of the industrial production index:
Similar, but not identical, as can be seen by comparing the two series separately in the two countries, i.e. in Italy:
and in Germany:
From which you can see a couple of things: that the gap between the two series is greater in Germany than in Italy, and that at the end of the line, that is, with the advent of fasheesmo, the value-added series penalizes Germany more than Italy. The technical reasons for these differences, if you're interested, can be found here .
The bottom line is that, while there's not much to be happy about with the performance of our industrial production index, if we look at a more structural indicator like value added instead of this cyclical index, the situation is slightly better here (for the simple fact that it's slightly worse in Germany now that it can no longer dump energy with Russian gas). And in any case, compared to what's happening in Germany, which, as you know, is not the driving force but rather the dead weight of the Eurozone, what's happening here isn't something we should be reassured about, but it certainly doesn't justify the PD's loud, defeatist wails. Because if we're not doing much better (and within a monetary union, it's conceptually difficult to achieve that), we're not doing worse either.
This is a machine translation of a post (in Italian) written by Alberto Bagnai and published on Goofynomics at the URL https://goofynomics.blogspot.com/2025/11/qualche-appunto-sulla-crescita.html on Thu, 27 Nov 2025 16:40:00 +0000. Some rights reserved under CC BY-NC-ND 3.0 license.