Examining the Macroeconomic Performance of the Italian Economy and Analysing the Policies Used to Influence the Economic Cycle – The economy of any country is considered to be its backbone and governments tend to improve economic growth. According to Thorsby (2001) economic growth is considered to be an increase in the manufacturing of economic products and services, as compared with the previous year. Also, there are different indicators of economic growth and GDP (gross domestic product) is one of them. GDP is considered to be the value ( in monetary form) of all finished products and services in produced in a certain period of time by a country (Baye & Prince, 2016). In Italy, the GDP rate in 2016 was 1.29% and showed an increase up to 1.67% in 2017 but then declined in 2018 and 2019 with the percentages of 0.94% and 0.29%. In year 2020, Italy faced a sudden decline in GDP and it was -8.87%. However, the GDP in 2021 and 2022 was 5.77% and 4.23%, respectively (Statista, 2022).

It is highly suggested to the policy makers and economists of Italy to focus on efficient collection of tax via digitalization. Also, the tight fiscal policies (high tax rates) can also lead towards controlling inflation. Italy should also focus on the supply side policies for decreasing the rate of inflation. These include focus on innovation, high productivity as well as competition. These strategies can lead towards maintaining low prices and the inflation can be controlled in this way.