At the onset of hostilities, Italy was ill equipped also for a war fought in the air. Here are some numbers
Biplane fighters: around 330 CR.42, 280 CR.32,
Monoplane fighters: 118 G.50, 156 MC.200;
Bombers: 450 S.79, 308 S.81, 87 Z.1007, 170 BR.20, 200 Z.506
These numbers come from different sources and may be inaccurate, but it's clear that most of the fighters were outdated biplanes. In regards to the Macchi MC.200, it should be noted that this fighter had the dangerous tendency to enter a flat spin during tight turns. A redesign of the wing (suggested by another great, Italian aircraft designer, Sergio Stefanutti) was necessary to correct the problem but it was implemented only in the subsequent MC202. The third fighter, often mentioned, the Reggiane Re.2000 was turned down by the Regia Aereonautica, despite performing better than either the Fiat or Macchi, due to its integral wet wing, which was considered dangerous and prone to fire in case of battle damage.
Reggiane/Caproni subsequently redesigned the wing and introduced a pair of fighters, the Reggiane 2001 and 2002, which were essentially the same, but one powered by an Italian version of the DB601 engineered and built by Alfa Romeo, the other by a Piaggio radial engine of similar power. The latter engine is noteworthy because it's one of the few Italian engines built to be used with the 'good' B4 fuel in place of the poor Italian gasoline: this, and a higher compression ratio, gave this engine 150HP more than a similar unit designed for the standard Italian gasoline)
So, back to the original question, performance of the G.50 and the MC.200 was quite close, with the Macchi having a slight edge, but also having some ill flight characteristics.
When introduced in mid 1941, the crown of best fighter passed onto the Macchi MC.202 which was every bit as good as any German and British designs of the period. A pilot in a Macchi could go against the Spitfire V with confidence, the duel usually being decided by skill or (quite often it seems) by whom spotted the other first.
In mid 1942 I would give an 'honorable mention' to the then new Re.2002 because it was a versatile fighter-bomber capable of carrying external bombs and fuel tanks (or a mix) on 3 hard points for a maximum of 650Kg. Its engine was beginning to be outdated, but it was a very agile dogfighter and as such a dangerous opponent. It's interesting that Reggiane's lead designer, Ing. Longhi, worked for some years in the States, at Curtiss and Seversky, and he was friend with Alexander Kartveli (there was a longstanding rumor that Caproni and Republic aircraft had a dealing of sort for the transfer of technology, though the latter always denied, especially after the US and Italy went on to fight on opposite fronts).
This is a hopefully quite accurate portrait of what Italy had to offer up to 1942