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. Italy is one of the major agricultural powers in the European Union. 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. Italy is suffering from a decline in global competitiveness.

2. Main Industry Sectors
Economic Overview
Foreign Direct Investment [FDI]
FDI Government Measures
Country Strong Points
Country Weak Points
Foreign Trade Overview

3. 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.
Italy is one of the major agricultural powers in the European Union.
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.
Italy is suffering from a decline in global competitiveness.

4. The manufacture of luxury goods (haute couture, cars, delicatessen foods) represents a significant
part of the Italian industry.
Italy is the prime exporter of luxury goods.
Italy’s 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.

5. 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.
The exports and investments recovered in 2010, providing a growth rate evaluated at
1% of the GDP.
The forecast for 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.

6. In relation to its European neighbors, Italy does not attract but a small amount of foreign direct
investment (FDI).
After their fall in 2008, under the effect of the global crisis, the FDI flows started to revive in 2009.
The privatization program led by the country, the liberalization of the energy and the markets of
telecommunications offer interesting opportunities to investors.
A strict labor law, high taxes, inefficient public services, corruption and the activities linked to organized
crime are some of the hindrances to investment.

7. There is hardly any assistance in Italy for promoting foreign investment.
This trend is reinforced by the European Union which wants Italy to harmonize its tax
incentives with the Community regulations.
Italy only promotes the development of its regions which are in difficulty, in order to
facilitate SME activity and job creation.
The defense sector and other sectors likely to compromise public safety are not open to
foreign investors.
The Italian Institute for Foreign Trade lists and makes available a guide to aids for setting
up business in Italy.

8. Thanks to the State withdrawal, the market is opening up to competition in several sectors (energy,
telephone, etc.).
The SME grouping allows for great capacity for adaptation. Italy also has a qualified work force (technical
knowledge and high quality production).
Entrepreneurs are creative and innovative.

9. The procedural costs, slow administration processes, red tape and financial scandals do not
encourage investments.
In some regions, infrastructures are poor, especially in the south of the country.

10. 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.
Italy 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.

11. Visit us to download for related reports
Market Opportunities of products and Services in Italy.
Export and investment sector opportunities in Italy.
Overview of Trade Regulations, Customs and Standards Italy.
Italy Investment guide for beginners.
Business and Project Financing in Italy.
Business Travel Advisory in Italy.

12.  China  Australia
 Mexico  Germany
 United States  France
 India  Spain
 Canada  South Korea
 Russia  Vietnam
 Hong Kong  Saudi Arabia
 Colombia  Poland
 Brazil  South Africa
 Turkey  Nigeria
 Indonesia  Argentina
 Egypt  UAE
 Singapore  Netherland
 United Kingdom  Sweden
 Italy  Thailand
 Japan  Israel
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