Italy: Economy Overview

Italy has a diversified industrial economy, which is divided into a developed industrial north, dominated by private companies, and a less-developed, welfare-dependent, agricultural south, with high unemployment.

Economy Overview

The Italian economy is driven in large part by the manufacture of high-quality consumer goods produced by small and medium-sized enterprises. Italy also has a sizable underground economy, which by some estimates accounts for as much as 15% of GDP. These activities are most common within the agriculture, construction, and service sectors. Italy has moved slowly on implementing needed structural reforms, such as lightening the high tax burden and overhauling Italy's rigid labor market and over-generous pension system and these conditions will be exacerbated by the recent global financial crisis. The Italian government is seeking to rein in government spending, but the leadership faces a severe economic constraint: Italy's official debt remains above 100% of GDP, and the fiscal deficit - 1.5% of GDP in 2007 - could approach 3% in 2009 as political pressure to stimulate the economy and the costs of servicing Italy's debt rise. The economy will continue to contract through 2009 as the global demand for exports drop. A tax amnesty program implemented in late 2009 to repatriate untaxed assets held abroad has netted the federal government more than $135 billion.

GDP (purchasing power parity):

$1.739 trillion (2009 est.)
country comparison to the world: 11
$1.832 trillion (2008 est.)
$1.857 trillion (2007 est.)
note: data are in 2009 US dollars

GDP (official exchange rate):

$2.118 trillion (2009 est.)

GDP - real growth rate:

-5.1% (2009 est.)
country comparison to the world: 188
-1.3% (2008 est.)
1.4% (2007 est.)

GDP - per capita (PPP):

$29,900 (2009 est.)
country comparison to the world: 46
$31,500 (2008 est.)
$31,900 (2007 est.)
note: data are in 2009 US dollars

GDP - composition by sector:

agriculture: 1.8%
industry: 25%
services: 73.1% (2009 est.)

Labor force:

24.97 million (2009 est.)
country comparison to the world: 23

Labor force - by occupation:

agriculture: 4.2%
industry: 30.7%
services: 65.1% (2005)

Unemployment rate:

7.7% (2009 est.)
country comparison to the world: 79
6.8% (2008 est.)

Investment (gross fixed):

18.9% of GDP (2009 est.)
country comparison to the world: 105

Budget:

revenues: $969.9 billion
expenditures: $1.082 trillion (2009 est.)

Inflation rate (consumer prices):

0.8% (2009 est.)
country comparison to the world: 42
3.4% (2008 est.)

Commercial bank prime lending rate:

10.26 % (31 December 2009)
country comparison to the world: 80
11.31% (31 December 2008)

Stock of domestic credit:

$3.274 trillion (31 December 2009)
country comparison to the world: 9
$3.047 trillion (31 December 2008)

Agriculture - products:

fruits, vegetables, grapes, potatoes, sugar beets, soybeans, grain, olives; beef, dairy products; fish

Industries:

tourism, machinery, iron and steel, chemicals, food processing, textiles, motor vehicles, clothing, footwear, ceramics

Industrial production growth rate:

-13.5% (2009 est.)
country comparison to the world: 154

Oil - production:

146,500 bbl/day (2009 est.)
country comparison to the world: 47

Natural gas - production:

8.119 billion cu m (2009 est.)
country comparison to the world: 44

Current account balance:

$-78.03 billion (2007 est.)
country comparison to the world: 188
$-51.03 billion (2007 est.)

Exports:

$412.9 billion (2009 est.)
country comparison to the world: 8
$546.3 billion (2008 est.)

Exports - commodities:

engineering products, textiles and clothing, production machinery, motor vehicles, transport equipment, chemicals; food, beverages and tobacco; minerals, and nonferrous metals

Exports - partners:

Germany 12.6%, France 11.57%, US 5.92%, Spain 5.69%, UK 5.13%, Switzerland 4.69% (2009)

Imports:

$410.2 billion (2009 est.)
country comparison to the world: 8
$547.3 billion (2008 est.)

Imports - commodities:

engineering products, chemicals, transport equipment, energy products, minerals and nonferrous metals, textiles and clothing; food, beverages, and tobacco

Imports - partners:

Germany 16.68%, France 8.82%, China 6.53%, Netherlands 5.63%, Spain 4.3%, Russia 4.12%, Belgium 4.08% (2009)

Debt - external:

$NA (31 December 2009)
$2.328 trillion (31 December 2008)

Stock of direct foreign investment - at home:

$366.9 billion (31 December 2009 est.)
country comparison to the world: 12
$339.9 billion (31 December 2008 est.)

Stock of direct foreign investment - abroad:

$556.5 billion (2009 est.)
country comparison to the world: 12
$511.5 billion (31 December 2008 est.)

Exchange rates: