Italian football is doing better than the economy

Italy won EURO 2020 after a fierce match with England. Is the strength of football a reflection of economic success? Not completely. Italy's GDP fell by 2020% in 8,9, and the country is struggling with a high unemployment rate of 10,5%. In addition, one in three Italians under 25 is out of work.

About the author

Pawel Majtkowski - analyst eToro on the Polish market, which shares its weekly commentary on the latest stock market information. Paweł is a recognized expert on financial markets with extensive experience as an analyst in financial institutions. He is also one of the most cited experts in the field of economy and financial markets in Poland. He graduated from law studies at the University of Warsaw. He is also the author of many publications in the field of investing, personal finance and economy.

Italy was only 7th in the ranking of the best FIFA teams before the tournament, but it turned out to be the best football team in Europe. This shows that, as in the case of investing, often past results (and based on them is created FIFA ranking) do not tell you everything about the current situation. The Italians' opponents - the English - were 4th in the ranking, but they lost the final in a penalty shootout. Earlier, the two best teams from the ranking - Belgium and France - were eliminated from the tournament. Poland also performed much worse than our team's 21st position in the ranking.

Economic situation: Italy vs England

England lost, although it has a richer football league and higher GDP per capita. Although England, Scotland and Wales played separately on the pitches, we took into account the United Kingdom in the economic comparison. In the UK, GDP per capita is 37.830 €, in Italy by 27 percent. less - 27.780 €and in Poland by as much as 64 percent. less - 13.640 €. However, the real difference in living standards between these countries is lower, and this is mainly due to differences in prices across markets. Eurostat publishes the Actual Individual Consumption (AIC) index, which better illustrates the real purchasing power of households as verified by purchasing power parity. For the UK, this ratio is 110%. the Community average, while for Italy it is 97% and for Poland it is 83%. (data for 2020).

The past year has been tough for almost all economies, just as yesterday's final was tough for both teams. The Italian economy shrank by 8,9 percent, slightly less than the British economy, which shrank by as much as 9,8 percent. Against this background, Poland stands out positively, because our GDP decreased only by 2,7%. The forecasts for this year are again in line with the FIFA ranking, the GDP of the United Kingdom is to increase by 6,8%, Italy by 5% and Poland by 4,8%. (European Commission and UK government forecasts).

Italians have the smallest problem with inflationwhich is only 1,2 percent of them. (HICP, 05/2021). In the UK, CPI inflation in May was higher than in Italy, but remains moderate - 2,1%. In Poland, HICP inflation, calculated according to the uniform European methodology, amounted to 4,8% in May. The opposite is the case with unemployment, which in Italy is as high as 10,5 percent. For comparison, in the UK it is 4,7%, and in Poland only 3,8%. (according to the Eurostat methodology). Italians have the biggest problem with unemployment of people under 25, where 31,7% are unemployed. people of this age. There is no job in the United Kingdom of 10,6% young, and in Poland it is 13,5 percent.

If we look at the stock exchanges in Milan and London, the former has been performing better since the beginning of the year. The most important Italian FTSE MIB index it has increased by 10,83 percent to date. while London 100 FTSE by 8,99% However, the WIG20 broke both these indices, rising by as much as 13,5 percent. It is a pity that it is not the stock exchanges that decide who wins EURO, because then we would be in a much better position.

If only the most important economic indicators were taken into account, the English should be the winners of the final. And yet the Italians became the champions on the pitch, who first equalized the score, and later turned out to be better in the penalty shootout competition. They showed that although they may play worse temporarily, they can stick to the assumed pattern in the long run. A similar principle should guide us when we invest our money - set a strategy and stick to it. We should also not forget about geographical diversification - maybe you will start by choosing the best companies from Italy, Great Britain and Poland?