Economic Trends/Outlook in Italy

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Economic Overview

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 Indicators 2009 2010 2011 2012 2013
GDP (billions USD) 2,116.64 2,055.11e 2,181.36e 2,245.91e 2,304.31e
GDP (Constant Prices, Annual % Change) -5.2 1.3e 1.1e 1.3e 1.4e
GDP per Capita (USD) 35,251 34,059e 35,985e 36,890e 37,698e
General Government Balance (in % of GDP) -3.9 -2.9e -2.8e -2.2e -2.4e
General Government Gross Debt (in % of GDP) 116.1 119.0e 120.3e 120.0e 119.7e
Inflation Rate (%) 0.8 1.6e 2.0e 2.1e 2.0e
Unemployment Rate (% of the Labor Force) 7.8e 8.5e 8.6e 8.3e 7.9e
Current Account (billions USD) -71.27e -59.25e -57.83e -57.66e -
Current Account (in % of GDP) -3.4e -2.8e -2.7e -2.6e -

Source: IMF - World Economic Outlook Database

Note: (e) Estimated Data


Main Sectors 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.


Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 3.8 29.7 66.3
Value Added (in % of GDP) 1.8 25.1 73.1
Value Added (Annual % Change) -3.1 -13.4 -2.5

Source: World Bank - Last Available Data.

For more detailed background on Industries in Italy, click here.

Indicator of Economic Freedom

Moderately free
World Rank:
Regional Rank:

Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation


Country Risk

See the Country Risk Analysis Provided By Ducroire.


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