At the end of the 1950s, the Italian economy – the reconstruction phase completed about a decade ago – was going through an unprecedented period of development, characterized by high rates of income growth, relative price stability and a satisfactory balance of accounts with abroad. The age-old problem of unemployment also seemed to be on its way to a solution: partly through the increase in jobs in industry and tertiary activities and partly due to the resumption of emigration.
Even in the period 1960-76, the Italian economy continued to develop; but the periods of expansion alternated with others characterized by slowdown in production, inflationary tensions and imbalances in the external accounts.
For a better understanding of the trend of the economic situation over the entire period, the three subperiods 1960-64, 1965-69 and 1970-76 should be considered separately. For each of them, a succinct description of the economic trend will be given in this paragraph, as shown by the data in tab. 13 and by others from official sources; in the next section we will examine the overall dynamics of the main aggregates in each subperiod and in the entire interval 1960-76.
In the years 1960-64 there was a transition from a phase of accelerated development to one of a rather serious slowdown in production: the rate of increase of the gross domestic product at constant prices, reached in 1961 the absolute maximum of the post-war period (+ 8.2%), was lowered to 2.6% in 1964, while the rate of increase in the general level of prices, which had remained between 2 and 3% per annum since the early 1950s, rose to 6-9% between 1962 and 1964.
In the five-year period 1965-69 there was a clear improvement, both from the point of view of production (the growth rate of the gross domestic product was on average 5.6% per year) and from that of price stability, the increase of which it was contained within the limits of 3% per annum. The situation of the foreign accounts is particularly satisfactory: year after year Italy accumulated conspicuous surpluses in the current transactions account, with peaks that in 1968 and 1969 exceeded 1,500 billion a year. Even the accounts of the public administration as a whole (state, local authorities, social security institutions, etc.) continued to close – as had always happened from the beginning of the 1950s onwards – with a moderate current account surplus, even if the ‘
According to transporthint, the 1970-76 period opens with a year that is not unsatisfactory as regards the increase in gross domestic product (5%); but other important aggregates are already beginning to show worrying signs of abating: in 1970 fixed investments increased, in real terms, by only 2.7% against increases of the order of 9-10% in the previous three years; the surplus of current transactions with foreign countries gives way to a deficit not negligible (approximately −446 billion); the net debt of the public administration exceeds 1,700 billion; and prices rise by an average of 6.7%. In 1971 the situation worsened in all respects, except that of the external accounts, which improved, but only because the reduced pace of production slowed down the development of imports. Real domestic product grows by just 1.6% (the lowest increase in the last twenty years); prices are still rising at a sustained pace (+ 7.2%) and the net debt of the public administration exceeds 3,000 billion. Lastly, fixed investments at constant prices contracted for the first time after the two-year period 1964-65, albeit insignificantly (-3.1%). In the following two-year period 1972-73 there was a recovery of investment and production; but all the other main data show significant worsening: current transactions with foreign countries close in deficit (−267 billion in 1972 and −2859 billion in 1973); prices continue to grow at a rapid pace (+ 6.2% and + 11.7%); public sector debt increased (−4898 and −5235 billion, respectively, in 1972 and 1973). In 1974 the oil crisis hit, further complicating a situation already made heavy by the concomitant action of the slowdown in production and inflation. The year closed with an increase in gross domestic product of 3.4% while the annual average of the consumer price index increased by 19% compared to 1973. The deficit in current transactions with foreign countries reached 6181 billion. and the net debt of the public administration (−5992 billion) continues to expand.
In 1975, for the first time in post-war Italian economic history, the gross domestic product in real terms decreased compared to the previous year by 3.5%, in the presence of a further significant rise in prices (+ 17.3%, based on the implicit index of prices of gross domestic product). The deficit in current transactions with foreign countries falls to 276 billion, essentially due to the decline in production rates and the consequent contraction in the volume of imports of raw materials, intermediate products and energy sources. The net debt of the public administration reaches a record level of 15,205 billion, equal to about two and a half times that of the previous year.
In 1976 there was a new recovery in production, with a real increase of 5.6% in gross domestic product, accompanied by the persistence of both inflationary tensions (the implicit index of gross product prices rises by a further 17, 8%) and an exceptionally high level of net debt of the public administration (13,046 billion). With the recovery, the negative balance of foreign transactions rose again, reaching 2,305 billion.