Italy

Capital: Rome

Local time:
It is %T:%M %A in Rome, Milan

Exchange rate on :

GDP growth rate: 1.543% in 2012

FDI inward stock: 364 839 million USD in 2007

Country risk: See the country risk analysis from Italy provided by Ducroire.

Economic trends

The crisis has severely affected Italy. While most of the indicators (growth, exports, unemployment and public deficit) showed good results in 2007, industrial production suffered significant recession from 2008.  The sale of luxury goods dropped by almost 10% in 2009. As for the banking sector, it weathered the effects of the crisis better. However, consumption dropped and the rate of unemployment rose to around 8%. Inflation remained under control.
The government launched different social measures to try and help those who are most disadvantaged. However, this had the direct consequence of dramatically increasing the public expenses of a country which shows one of the most high public debts in the world (more than 100% of the GDP).

Main branches of industry

The agricultural sector contributes 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 the European Union agricultural powers. However, Italy has limited natural resources, and has to import most of the raw materials required for production and more than 80% of its energy resources.
Italy's industrial fabric is made up mostly of small and medium family businesses. More than 90% of industrial companies have less than 100 employees. In this context, the country is suffering from a decline in world competitiveness. The manufacture of luxury goods (haute couture, cars, delicatessen foods) represents a significant part of the Italian industry, as it 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 tertiary sector of services contributes 70% of the GDP. Italy is the third most-visited European country, behind France and Spain, so tourism plays a major role.

International trade

Italy is amongst the top 10 trade countries in the world. Manufactured goods account for more than 90% of the country's exports. The country shows a trade deficit, mainly due to the increase in oil prices, in 2008 (the country imports 80% of its energy resources), and the appreciation of the euro. The trade balance should continue to deteriorate over the coming years.