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flag Italy Italy: Economic and Political Outline

Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline

Economic Indicators

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 2009201020112012 (e)2013 (e)
GDP (billions USD) 2,116.642,055.11e2,245.71e2,287.702,322.41
GDP (Constant Prices, Annual % Change) -5.21.3e0.60.30.5
GDP per Capita (USD) 35,25134,05937,04637,57737,994
General Government Balance (in % of GDP) -3.9-3.1e-2.6-1.1-0.1
General Government Gross Debt (in % of GDP) 116.1119.0121.1e121.4120.1
Inflation Rate (%) 0.81.6e2.61.61.7
Unemployment Rate (% of the Labor Force) 7.88.48.28.58.6
Current Account (billions USD) -44.12-67.65e-78.24-68.10-58.32
Current Account (in % of GDP) -2.1-3.3e-3.5e-2.5-

Source: IMF - World Economic Outlook Database ; World Bank , Last Available Data

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) 3.7 29.3 66.9
Value Added (in % of GDP) 1.8 25.1 73.1
Value Added (Annual % Change) -3.1 -13.4 -2.8

Source: World Bank - Last Available Data.

 
 
 
 
Learn more about Market Analysis about Italy on Globaltrade.net, the Directory for International Trade Services.
 

Indicator of Economic Freedom

Score:
60.3/100
Position:
Moderately free
World Rank:
83/179
Regional Rank:
36/42

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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Foreign Trade in Figures

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.

 
Foreign Trade Indicators 20062007200820092010
Imports of Goods (million USD) 442,555511,662561,919415,105483,950
Exports of Goods (million USD) 416,875499,882542,748406,909447,847
Imports of Services (million USD) 98,032118,554127,207107,094108,184
Exports of Services (million USD) 97,372110,439114,52693,95397,021
Imports of Goods and Services (Annual % Change) 5.93.8-4.3-14.5-
Exports of Goods and Services (Annual % Change) 6.25.0---
Imports of Goods and Services (in % of GDP) 28.629.229.524.4-
Exports of Goods and Services (in % of GDP) 27.729.028.924.0-
Trade Balance (million USD) -12,5104,581-2,8411,458-27,278
Trade Balance (Including Service) (million USD) -14,038-5,080-15,405-10,020-39,188
Foreign Trade (in % of GDP) 56.358.258.348.4-

Source: WTO - World Trade Organization ; World Bank , Last Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2010
Germany 12.9%
France 11.5%
United States 6.0%
Spain 5.7%
United Kingdom 5.3%
See More Countries 58.5%
Main Suppliers
(% of Imports)
2010
Germany 15.9%
France 8.3%
China 7.8%
Netherlands 5.3%
Spain 4.5%
See More Countries 58.1%

Source: Comtrade, Last Available Data

 

Main Products

Main Exports
(% of Exports)
2010
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 4.1%
Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses "incl. those in the form of transdermal administration" or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006) 3.1%
Parts and accessories for tractors, motor vehicles...Parts and accessories for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles of heading 8701 to 8705, n.e.s. 2.9%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 1.9%
Footwear with outer soles of rubber, plastics,...Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of leather (excl. orthopaedic footwear, skating boots with ice or roller skates attached, and toy footwear) 1.6%
See More Products 86.4%
Main Imports
(% of Imports)
2010
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 9.5%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 5.8%
Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons 5.7%
Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses "incl. those in the form of transdermal administration" or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006) 2.8%
Diodes, transistors and similar semiconductor...Diodes, transistors and similar semiconductor devices; photosensitive semiconductor devices, incl. photovoltaic cells whether or not assembled in modules or made-up into panels (excl. photovotaic generators); light emitting diodes; mounted piezo-electric crystals; parts thereof 2.4%
See More Products 73.8%

Source: Comtrade, Last Available Data

 
See More Products
More imports (Intracen Data)
More exports (Intracen Data)
 

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Sources of General Economic Information

Ministries
Ministry of the Economy and Finance
Ministry of Economic Development
Ministry of Commerce
Ministry of Agricultural and Forestry Policies
Ministry of Foreign Affairs
Statistical Office
National Institute of Statistics (Istat)
Central Bank
Bank of Italy
Stock Exchange
Italian Stock Exchange
Search Engines
Yahoo! Italy
Altavista Italy
Arianna
Excite Italy
Iltravatore
Lycos Italy
Sharelook Italy
Shiny Seek
Virgilio
Economic Portals

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Political Outline

Executive Power
The Prime Minister is the head of the government and holds the executive power, which includes the implementation of the law and the running of the everday business of the country. The Prime Minister is appointed by the President and confirmed by the Parliament, on the basis of the support of the majority. He has a five year term of office. The Council of Ministers is appointed by the Prime Minister and approved by the President.
Legislative Power
The legislative power in Italy is bicameral. The Parliament consists of two houses: the Senate (Senato della Repubblica) which has 315 members and the Chamber of deputies (Camera dei deputati) which has 630. The members of the two houses are directly elected, by universal suffrage, by a complex electoral system (amended in 2005) combining proportional representation with a majority vote. The executive branch of government depends directly or indirectly on the support of parliament, often expressed by a vote of confidence. The Prime Minister cannot dissolve Parliament. Italian citizens enjoy considerable political rights.
Main Political Parties
There are very many parties in Italy and none of them can claim power alone. Because of this, parties have to come to an agreement to form coalition governments.
The country's political parties align themselves in two broad coalitions:

1)The Union : center-left including mainly political parties like the Democrat Party (Partido Democratico) led by Walter Veltroni, the Party Italia dei Valori (IdV), led by Antonio Di Pietro and the Italian Communist Party.

2) The House of Freedoms: center-right including mainly parties like the People of Freedom (Popollo Della Liberta), led by Silvio Berlusconi, the LEGA (Northern League) led by Umberto Bossi and the Movement for Autonomies (MPA), led by Raffaele Lombardo.
Current Political Leaders
President : Giorgio NAPOLITANO (since May 2006)
Prime Minister: Interim: Mario MONTI - Independent (since 13 November 2011)
Next Election Dates
Legislative elections: 2013
 

Indicator of Freedom of the Press

World Rank:
50/178
Evolution:
1 place down compared to 2009

Source: Worldwide Press Freedom Index 2010, Reporters Without Borders

 

Indicator of Political Freedom

Ranking:
Free
Political Freedom:
1/7
Civil Liberties:
2/7

Map of freedom 2010
Source: Freedom House

 

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Last Updates: January 2012