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.

GDP (purchasing power parity):

$1.823 trillion (2008 est.)
country comparison to the world: 11
$1.841 trillion (2007 est.)
$1.814 trillion (2006 est.)
note: data are in 2008 US dollars

GDP (official exchange rate):

$2.314 trillion (2008 est.)

GDP - real growth rate:

-1% (2008 est.)
country comparison to the world: 209
1.5% (2007 est.)
2.1% (2006 est.)

GDP - per capita (PPP):

$31,300 (2008 est.)
country comparison to the world: 41
$31,700 (2007 est.)
$31,200 (2006 est.)
note: data are in 2008 US dollars

GDP - composition by sector:

agriculture: 2%
industry: 27%
services: 71% (2008 est.)

Labor force:

25.11 million (2008 est.)
country comparison to the world: 21

Labor force - by occupation:

agriculture: 4.2%
industry: 30.7%
services: 65.1% (2007 est.)

Unemployment rate:

6.8% (2008 est.)
country comparison to the world: 86
6.2% (2007 est.)

Investment (gross fixed):

20.9% of GDP (2008 est.)
country comparison to the world: 97

Budget:

revenues: $1.068 trillion
expenditures: $1.132 trillion (2008 est.)

Inflation rate (consumer prices):

3.4% (2008 est.)
country comparison to the world: 42
1.8% (2007 est.)

Commercial bank prime lending rate:

NA% (31 December 2008)
country comparison to the world: 75
10.93% (31 December 2007)

Stock of domestic credit:

$2.897 trillion (31 December 2008)
country comparison to the world: 9
$2.932 trillion (31 December 2007)

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:

-2.8% (2008 est.)
country comparison to the world: 160

Oil - production:

162,200 bbl/day (2007 est.)
country comparison to the world: 44

Natural gas - production:

84.88 billion cu m (2007 est.)
country comparison to the world: 8

Current account balance:

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

Exports:

$546.9 billion (2008 est.)
country comparison to the world: 7
$502.4 billion (2007 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 12.8%, France 11.2%, Spain 6.6%, US 6.3%, UK 5.3% (2008)

Imports:

$546.9 billion (2008 est.)
country comparison to the world: 8
$498.1 billion (2007 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%, France 8.6%, China 6.2%, Netherlands 5.3%, Libya 4.6%, Russia 4.3% (2008)

Debt - external:

$2.328 trillion (31 December 2008)
country comparison to the world: 6
$2.5 trillion (31 December 2007)

Stock of direct foreign investment - at home:

$376.6 billion (31 December 2008 est.)
country comparison to the world: 13
$364.8 billion (31 December 2007 est.)

Stock of direct foreign investment - abroad:

$565.3 billion (2008 est.)
country comparison to the world: 11
$520.1 billion (31 December 2007 est.)

Exchange rates:

euros (EUR) per US dollar - 0.6827 (2008 est.), 0.7345 (2007), 0.7964 (2006), 0.8041 (2005), 0.8054 (2004)

Source: CIA - The World Factbook