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invest ing & doing business in i taly


InvEstIng and dOIng BusInEss In Italy


Like the rest of the world, the nation of Italy has suffered during the last two or three years as the global economic crisis has taken a grip. However, partly due to a well- established export and agricultural trade, Italy is in recovery. It may be slow, but the economy is on a steady upward turn - good news for the country’s population, as well as anyone with an eye on potential investment opportunities. This month, we take a closer look at Italy, from its economic history to the outlook for the coming year.


Italy is a vast and culturally-rich country with one of the most well-developed economies in the world. The Italian population is considerable, amounting to 60.2 million, but as the country spans an area of 301,338 square km, overcrowding is not an issue and residents enjoy a relatively high standard of living, with the per capita Gross Domestic Product (GDP) rating generally higher than the EU average. The country is somewhat divided into two


categories – remote, rural regions perfect for agriculture, predominantly in the south; and sleek, cosmopolitan cities bursting with history, style and commercial opportunity, focused more in the north and tending to be dominated mostly by larger corporations. Both sides to this eclectic country’s coin offer attractive prospects to potential residents, visitors and investors alike.


Historic Overview Italy has endured a somewhat tumultuous and eventful past. It became a nation-state in 1861 when the regional states of the peninsula were united with Sardinia and Sicily under King Victor EMMANUEL II, but then during the 1920s Benito Mussolini developed a Fascist dictatorship, leading to a disastrous alliance with Nazi Germany which eventually led to Italy’s defeat in World War Two. Following the cessation of the war, a democratic republic took charge in 1946 and a revival of the Italian economy ensued. A charter member of NATO and the European


Economic Community (EEC), Italy has occupied a frontal position on European economic and political unification, ultimately joining the Economic and Monetary Union in 1999. As one of the seven largest member states of the European Union, along with the UK, Spain, Germany, the Netherlands, France and Poland, Italy is a modern and developed country with a large and varied export industry.


Economic Overview The Italian economy is recovering from the setbacks caused by the global economic crisis at a moderate rate. A significant decrease in global demand gravely affected the country’s exports, causing their volumes to contract by 19% in 2009. However, the recovery continues and this is a recovery which can be attributed to several features. As well as a high level of public literacy and an efficient workforce, this is a country amazingly rich in history and culture; two considerable factors which draw countless visitors each and every year. As the fifth most visited country in the world, tourism no doubt plays a major role in maintaining Italy’s credible ranking in the world economy charts. It is an undeniable fact that tourism is good for business, so it is perhaps little wonder that Italy’s economy is once again on the up, all be it slowly. The Italian economy is also largely driven by the


production and export of high-quality goods, many of which the country is renowned for. At the smaller end of the scale there is a huge demand for Italian hand-made leather goods, wine and food stuffs – the majority of this market is dominated by smaller companies, many of which are family-run. At the other end of the scale, Italy can boast a large array of luxury goods across sectors including the motor industry, fashion and electronics from brands such as Pirelli, Zanussi, Indesit, Ferrari and Dolce and Gabbana, amongst others. With such an export portfolio covering both the mid-range and luxury sectors, it is perhaps easier to understand why the Italian economy is on the up. It saw a return to growth in the third quarter of 2009, after five consecutive quarters of contraction during the worst period of the economic downturn. According to the Italian national statistics agency, Istat, the economy also grew by 1.3% during 2010 ➔


fi MONTHLY MARCH 2011


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