Economic trends
Italy had experienced a lower growth than the European average, and it was severely affected by the global crisis, its economy reduced to -5% in 2009. However, it benefited from the revival in global demand and the return of confidence. The exports and investments recovered in 2010, providing a growth rate evaluated at 1% of the GDP. According to the forecast, the growth rate should remain weak in 2011.
The government has launched different social measures in order to try to help those who are in the most unfavorable conditions, which had a direct consequence on increasing dramatically the public expenditures of a country that has one of the highest public debts in the world (more than 100% of the GDP). The government has, then, adopted a rigorous plan of EUR 24 billions in three years, it has frozen salaries and increased taxes with the purpose of attempting to bring the public deficit to 2.7% in 2012 and reducing its debt/GDP ratio. The priority is also given to the fight against tax avoidance in this country where the black economy is very significant.
The unemployment rate has risen to about 8.7%. Regional inequity is very pronounced, specially between the north, which is very industrialized and dynamic, and the rural and poor regions of Mezzogiorno in the south.
Main branches of industry
The agricultural sector contributes to about 2% of the Italian GDP. Italy is the biggest European producer of rice, fruits and vegetables, and also the world's biggest producer and exporter of wine. The country is one of the major agricultural powers in the European Union. However, Italy has limited natural resources. The country has to import most of the raw materials required for production and more than 80% of its energy resources.
Italy's fabrics industry is made up mostly of small and medium family businesses. More than 90% of the industrial companies have less than 100 employees. In this context, the country is suffering from a decline in global competitiveness. The manufacture of luxury goods (haute couture, cars, delicatessen foods) represents a significant part of the Italian industry. The country is the prime exporter of luxury goods. Its main industries deal with precision machinery, motor vehicles, chemical products, pharmaceutical products, electrical items, fashion and clothing.
The services sector contributes to 70% of the GDP. Tourism plays a major role, Italy is the third most-visited European country, after France and Spain.
International trade
Italy is amongst the top 10 trade countries in the world and trade represents almost 60% of the GDP. Manufactured goods account for more than 90% of the country's exports. The country shows a deficit in trade and its balance got worse after the rise in oil prices in 2008 (the country imports 80% of its energy resources), and the appreciation of the euro. Despite its recent improvement, the trade balance should continue to deteriorate in the next coming years. The main trade partners of Italy are the European Union (Germany, France, Spain, Netherlands, United Kingdom), China, the United States, Switzerland and Russia.
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Last updates: January 2012
