An assessment of Italy's energy trade balance

As the global economy faces a new, sharp energy shock amplified by the war in Ukraine, this study analyses developments in Italy’s energy trade balance, both in the long run and from a comparative perspective, in order to appraise any noteworthy changes in the country’s external dependence. Using data from 1970 to 2021, the analysis shows that the country’s energy deficit peaked at almost 6 per cent of GDP in 1981 after the second oil shock at the end of the 1970s. In 2021, it amounted to 2.4 per cent of GDP, double that of the previous year; this value, which is relatively low from a historical perspective, is slightly higher than that of the other main euro-area countries. The geographical concentration of Italy’s energy imports, though declining over the past two decades, remains high, especially for natural gas. The 2021 deterioration in Italy’s cyclically-adjusted current account surplus is more than fully explained by the rise in energy import prices.