Economy of Italy

The economy of Italy is a <a href="/facts/Developed_country/sqwTSDHm">highly developed</a> <a href="/facts/Social_market_economy/9zHvc3YR">social market economy</a>. It is the third-largest national economy in the <a href="/facts/European_Union/6GYcR8qM">European Union</a>, the <a href="/facts/List_of_countries_by_GDP_(nominal)/k3Lf3RIL">8th-largest economy in the world by nominal GDP</a>, and the <a href="/facts/List_of_countries_by_GDP_(PPP)/fDw3Ibeo">11th-largest by PPP-adjusted GDP</a>. The country has the second-largest manufacturing industry in <a href="/facts/Europe/DTAtrKfh">Europe</a>, which is also the <a href="/facts/List_of_countries_by_manufacturing_output/3qW7bcdy">7th-largest in the world</a>. Italy has a <a href="/facts/Diversified_economy/8KHCE7Ss">diversified economy</a> which is dominated by the <a href="/facts/Tertiary_sector_of_the_economy/IbtKqotL">tertiary service sector</a>. The country is a <a href="/facts/Great_power/KBtjXLun">great power</a>, and is a <a href="/facts/Founding_members_of_the_European_Union/z19BktGW">founding member of the European Union</a>, the <a href="/facts/Eurozone/rK14yHsz">eurozone</a>, the <a href="/facts/Schengen_Area/3x2jdc8H">Schengen Area</a>, the <a href="/facts/Organisation_for_Economic_Co-operation_and_Development/CI9W2zGv">OECD</a>, the <a href="/facts/G7/P5xVoq5y">G7</a> and the <a href="/facts/G20/pFut6kJQ">G20</a>; it is the <a href="/facts/List_of_countries_by_exports/M6KuE0Gu">eighth-largest exporter in the world</a>, with $611 billion exported in 2021. Its closest trade ties are with the other countries of the European Union, with whom it conducts about 59% of its total trade. <a href="/facts/List_of_the_largest_trading_partners_of_Italy/gvj070KR">Its largest trading partners</a> are <a href="/facts/Germany/paluuWBX">Germany</a> (12.5%) and <a href="/facts/France/CxIeIKM3">France</a> (10.3%), followed by the <a href="/facts/United_States/P0sCdLe5">United States</a> (9%), <a href="/facts/Spain/bIyrB8EY">Spain</a> (5.2%), the <a href="/facts/United_Kingdom/kuPAILt2">United Kingdom</a> (5.2%) and <a href="/facts/Switzerland/LcGuxeTe">Switzerland</a> (4.6%).
In the post-World War II period, Italy saw a transformation from an agricultural-based economy which had been severely affected by the consequences of the <a href="/facts/World_War/pEzjDFFs">World Wars</a>, into one of the world's most advanced nations, and a leading country in <a href="/facts/International_trade/jB2m5TGX">world trade and exports</a>. According to the <a href="/facts/Human_Development_Index/hQpz064I">Human Development Index</a>, the country enjoys a <a href="/facts/List_of_countries_by_Human_Development_Index/seg5TkPK">very high standard of living</a>. According to <a href="/facts/The_Economist/KNjzFCVU">The Economist</a>, Italy has the world's 8th highest <a href="/facts/Quality_of_life/37ljmgAH">quality of life</a>. Italy owns the world's third-largest <a href="/facts/Gold_reserve/Sbl9IIDI">gold reserve</a>, and is the third-largest net contributor to the <a href="/facts/Budget_of_the_European_Union/UCH2G5Q9">budget of the European Union</a>. Furthermore, the advanced country <a href="/facts/National_wealth/AEwfr59D">private wealth</a> is one of the largest in the world. In terms of private wealth, Italy ranks second, after <a href="/facts/Hong_Kong/4nAf3mqQ">Hong Kong</a>, in <a href="/facts/List_of_countries_by_total_wealth/AEwfr59D">private wealth to GDP ratio</a>. Among <a href="/facts/OECD/CI9W2zGv">OECD</a> members, Italy has a highly efficient and strong <a href="/facts/Italian_welfare_state/Q8SSal9l">social security system</a>, which comprises <a href="/facts/Welfare_state/JR15sKL1">roughly 24.4% of GDP</a>. 
Italy is the world's <a href="/facts/List_of_countries_by_manufacturing_output/3qW7bcdy">seventh-largest manufacturing country</a>, characterised by a smaller number of global multinational corporations than other economies of comparable size and many dynamic <a href="/facts/Small_and_medium-sized_enterprises/86CC7BvV">small and medium-sized enterprises</a>, notoriously clustered in several <a href="/facts/Industrial_district/XLUwvj4o">industrial districts</a>, which are the backbone of the Italian economy. Italy is a large manufacturer and exporter of a significant variety of products. Its products include <a href="/facts/Machinery/wTCxFRfs">machinery</a>, <a href="/facts/Vehicles/jSIEqANL">vehicles</a>, <a href="/facts/Pharmaceuticals/h9mhwWP2">pharmaceuticals</a>, furniture, food and clothing. Italy has a significant <a href="/facts/Trade_surplus/0kWmf4Cw">trade surplus</a>. The country is also well known for its influential and innovative business economic sector, an industrious and competitive agricultural sector (Italy is the world's largest wine producer), and <a href="/facts/Manufacturer/3qW7bcdy">manufacturers</a> of creatively <a href="/facts/Industrial_design/6oBprKds">designed</a>, high-quality products: including <a href="/facts/Automobile/I1IsH8IK">automobiles</a>, <a href="/facts/Ship/418ptx1L">ships</a>, <a href="/facts/Home_appliance/JYKalzw6">home appliances</a>, and <a href="/facts/Designer_clothing/UkJW2N3w">designer clothing</a>. Italy is the largest hub for <a href="/facts/Luxury_goods/WGfwoF5a">luxury goods</a> in Europe and the third-largest luxury hub globally. Italy has a strong <a href="/facts/Cooperative/kQFtXWzt">cooperative</a> sector, with the largest share of the population (4.5%) employed by a cooperative in the EU.
Despite these important achievements, the country's economy today suffers from few structural and non-structural problems. <a href="/facts/Annual_growth_rate/WnD5syC7">Annual growth rates</a> have often been below the EU average. Italy was somewhat hit by the <a href="/facts/Late-2000s_recession/9LoVUhLf">late-2000s recession</a>. Massive government spending from the 1980s onwards has produced a severe rise in <a href="/facts/Public_debt/DerGEK3v">public debt</a>. In addition, Italian living standards are extremely high on average, but have a considerable North–South divide: the average GDP per capita in the much richer <a href="/facts/Northern_Italy/paEuCnnf">Northern Italy</a> significantly exceeds the EU average, while some regions and provinces in <a href="/facts/Southern_Italy/KJYA2ooC">Southern Italy</a> are significantly below the average. In <a href="/facts/Central_Italy/UIRNQyqC">Central Italy</a>, GDP per capita is instead average. In recent years, Italy's GDP per capita growth slowly caught-up with the eurozone average, while its employment rate also did. However, economists dispute the official figures because of the large number of <a href="/facts/Informal_sector/LVuy5rEJ">informal jobs</a> (estimated to be between 10% and 20% of the <a href="/facts/Labour_force/rg2g6n5W">labour force</a>) that lift the inactivity or <a href="/facts/Unemployment_rates/C7XNR6pN">unemployment rates</a>. The <a href="/facts/Shadow_economy/HDL3tQDz">shadow economy</a> is highly represented in Southern Italy, while it becomes less intense as one moves north. In real economic conditions, Southern Italy almost matches Central Italy's level.

Economy of Italy open-in-new

Economy of Italy