later in the decade; thus, it finally
began to address its huge fiscal imbalances. Subsequently, the
government has adopted fairly stringent budgets, abandoned its
inflationary wage indexation system, and started to scale back its
generous social welfare programs, including pension and health care
benefits. In December 1998, Italy adopted a budget compliant with
the requirements of the European Monetary Union (EMU);
representatives of government, labor, and employers agreed to an
update of the 1993 "social pact," which has been widely credited
with having brought Italy's inflation into conformity with EMU
requirements. In 1999, Italy must adjust to the loss of an
independent monetary policy, which it has used quite liberally in
the past to help cope with external shocks. Italy also must work to
stimulate employment, promote wage flexibility, and tackle the
informal economy.

GDP: purchasing power parity--$1.181 trillion (1998 est.)

GDP--real growth rate: 1.5% (1998 est.)

GDP--per capita: purchasing power parity?$20,800 (1998 est.)

GDP--composition by sector:
agriculture: 3.3%
industry: 33%
services: 63.7% (1994)

Population below poverty line: NA%

Household income or consumption by percentage share:
lowest 10%: 2.9%
highest 10%: 23.7% (1991)

Inflation rate (consumer prices): 1.8% (1998 est.)

Labor force: 23.193 million

Labor force--by occupation: services 61%, industry 32%,
agriculture 7% (1996)

Unemployment rate: 12.5% (1998 est.)

Budget:
revenues: $559 billion
expenditures: $589 billion, including capital expenditures of $NA
(1998 est.)

Industries: tourism, machinery, iron and steel, chemicals, food
processing, textiles, motor vehicles, clothing, footwear, ceramics

Industrial production growth rate: 0.5% (1996 est.)

Electricity--production: 226.707 billion kWh (1996)

Electricity--production by source:
fossil fuel: 80.02%
hydro: 18.25%
nuclear: 0%
other: 1.73%

Electricity--consumption: 264.007 billion kWh (1996)

Electricity--exports: 800 million kWh (1996)

Electricity--imports: 38.1 billion kWh (1996)

Agriculture--products: fruits, vegetables, grapes, potatoes, sugar
beets, soybeans, grain, olives; beef, dairy products; fish

Exports: $243 billion (f.o.b., 1998)

Exports--commodities: engineering products, textiles and clothing,
production machinery, motor vehicles, transport equipment,
chemicals; food, b