In this paper we revisit the performance of Italian productivity over the last fifteen years. The need for a reinterpretation stems from a widespread representation of permanent weakness, which we deem inadequate given the available data. We consider multifactor productivity (TFP) in the market economy sector, whose dynamics underwent an upward reassessment in the latest ISTAT revision. This change, largely overlooked, has not been adequately appreciated. We show that the improvement in TFP over the course of a decade (between 2012 and 2022) is also visible in comparison with European partners. Italian multifactor productivity initially realigned with the trend of the major economies, only to then surpass them in the years surrounding the pandemic. We identify the reallocation of resources and the strengthening of the economic cycle as the main drivers of this process. The deteriorations of the last three years (2023-2025) have therefore not exposed and amplified a previous weakness, but rather have interrupted a prolonged, relatively positive phase. We also address the problem of international comparability of productivity data, caused by the different deflation methods adopted by national statistical offices. With regard to labor productivity, we highlight how alternative measures of GDP relative prices across countries lead to dynamics for Italy relative to Germany and France that differ from those deducible from the national accounts.

Read the document