Economic trends
Italy, having already experienced weak economic growth when compared with the European average, was severely affected by the global crisis. Its economy contracted by 5% in 2009. Despite having turned around in 2010, the Italian economy once again entered into a recession in the second half of 2011 and is expected to contract by 1.3% in 2012.
Following the resignation of Silvio Berlusconi, the technocrat Mario Monti launched the latest austerity plan designed to boost growth and restore confidence. Priorities include the handling and reduction of the colossal public debt (120% of GDP), as well as maintaining the banking system and Italy’s place in the Eurozone. An accelerated path to retirement reform, the reintroduction of a real estate tax, and a tax hike on luxury products are also expected. Measures for economic liberalization were adopted in January and submitted to Parliament for approval.
The unemployment rate, which has risen since the global financial crisis, sits around 8.7% without the inclusion of layoffs. Regional inequalities are important as well, between the industrial and dynamic north and the rural and poorer Mezzogiorno south.
Main branches of industry
The agricultural sector contributes to approximately 2% of the Italian GDP. Italy is the biggest European producer of rice, fruits, and vegetables, as well as the world’s biggest wine producer and exporter. The country is one of the major agricultural players in the European Union. Yet, Italy has limited natural resources. The country must import most of the raw materials required for production and more than 80% its energy.
The Italian fabric industry is mostly composed of small and medium family businesses. More than 90% of industrial companies have less than 100 employees, thus lowering the country’s competitiveness in the global market. Luxury goods (haute couture, cars, gourmet food items) play an important role in Italian industry. The country is the premier exporter of luxury goods. Precision machinery, motor vehicles, chemical products, pharmaceuticals, electrical items, fashion, and clothing make up its major industries.
The service sector contributes to 70% of the GDP. Tourism plays a major role, making Italy the third biggest tourist attraction in Europe, after France and Spain.
International trade
Italy is one of the top 10 trade nations in the world, with trade making up more than 50% of its GDP (2008-2010 average). Manufactured goods represent more than 90% of the country’s exports. Italy maintains a trade deficit, with the imbalance worsening due to the 2008-9 financial crisis and rising imports over exports. This trend is expected to continue over the next few years. Its main trade partners are European Union nations (Germany, France, Spain, the Netherlands, the United Kingdom), China, the United States, Switzerland, and Russia.
© Export Entreprises SA, all rights reserved.
Last updates: May 2012
