Italy, also known as The Boot, has been ranked
as the ninth largest economy in Europe.
The country borders France, Austria, Switzerland and Slovenia.
Its’ main industries are tourism, machinery,
chemicals, food processing, iron and steel,
motor vehicles, engineering products, textiles and clothing, ceramics and footwear.
Other exports include beverages, foodstuffs, chemicals, minerals, tobacco
and transport equipment, high quality furniture and electrical equipment.
The main sectors of the Italian economy are
Industry and Manufacturing sector
Tourism sector
Agricultural sector
Service sector
Trade sector
Industry sector
The country has a well developed industry sector characterized by large
corporations, medium sized corporations and small, family run industries.
The small and medium sized industries in Italy play a
major role in the development of the country’s economy.
The sector employees approximately 30% of the local
workforce and accounts for 75% of the total GDP.
Lack of raw materials has been a major challenge of this sector.
Tourism sector
This is one of the leading sectors in the country.
Italy boasts 51 UNESCO heritage sites which is the highest number in the world.
It receives many tourists from across the globe and the sector has managed to create
employment opportunities for many of the country citizens and foreigners as well.
The most visited cities of Italy include; Pisa, Venice, Rome,
Florence, Milan, Trieste and Trento among many other cities.
The sector accounts for 11.8% of the country’s total GDP.
In 2014, the country received more than 48.6 million visitors and this figure
was ranked the fifth highest in the world in terms of international arrivals.
Italy boasts a 4600 miles of coastline with numerous
ports that contribute to maritime transport.
Infrastructure is well developed and there are numerous expansive state
of the art roads and railway lines that connect its major cities.
The country has a large number of tourist accommodation facilities and
tour companies that have created numerous employment opportunities.
The well developed air transport system links the country to the rest of the world.
Agricultural sector
The country has a mountainous terrain which is not suitable for agriculture.
In 2010, a total of 1.6 million farms were identified in the
country and this summed up to 12.7 million hectares of land.
Most farms in Italy are family operated and on
average each family owns eight hectares of land.
The main agricultural items produced in the country include; citrus fruits,
maize corn, wheat, meat and dairy products, rice, soybeans, beets and sugar.
Italy is a leading producer of fruits including grapes, cherries, apricots,
lemons, apples, plums, peaches, olives, kiwi fruits and oranges.
The country is a leading producer of wine with some of the popular wine brands
including; Frascati, Piedmontese Barolo, Tuscan Chianti and Barbaresco.
The main agricultural fields of Italy include;
Grains fields account for 31% of the total agricultural land.
Vine yards and olive tree orchards , accounts for 5.4%
and 8.2 % of total agricultural land respectively.
Sugar beets occupy 2.4 % of agricultural land
Horticultural production accounts for 2.4% of Italy’s agricultural land.
Livestock and fish production is also a major agricultural practice in the country.
The Italian trade is dominated by machinery industry and automobiles.
It mainly exports motor cycles, luxury motor vehicles and scooters.
Service sector
This is the largest and the most developed sector in Italy.
It employs 68% of the country’s workforce.
The sector accounts for 74 % of the country’s Gross Domestic Product.
The banking industry is a major component of the service sector.
The industry traces its development back to the medieval times.
Italy’s Unicredit bank is one of the leading banks
in Europe with regards to market capitalization.
The Insurance industry is also a major component of the service sector.
Assicurazioni Generali Company in Italy is ranked the second
largest insurance company in the world in terms of revenues.
Transport, wholesale and retail sales is also major contributors of the sector.
Trade Sector
Italy has a well developed trade sector.
The country’s strategic location along the Mediterranean Sea enables trade to
thrive especially with the Middle East countries, North Africa and Eastern Europe.
The country is a leading exporter of a wide range of products
and currently it is the eighth top exporter in the world.
Its main export partners are mainly countries in
the EU such as Germany, United States of America,
Spain, The United Kingdom, France and Switzerland
and other countries such as China and Russia.
In 2016, the country exported goods with a net worth of $ 436.3 billion.
Machinery represents18% of the country’s total exports
and it is the leading export product in the country.
Metals and metal products represent 13% of total products exported.
Italy mainly exports its products to other European
Union nations mainly to Germany (12.6%), United
States (6.8%), and France (11.1%), Spain (4.4%)
and Switzerland (5.7%), United Kingdom (4.7%).
Italy offers premium goods and premium products and this
way, it has managed to create a niche in the global market.
Many of the brands exported from Italy are unique
and have gained large popularity across the globe.
Some of them include; Valentino, Armani, Benneton, Versace,
Lamborghini, Maserati, FIAT, Prada, Lancia and Alfa Romeo.
The Italian economy is ranked as the third largest in the Euro zone.
With a population of 61.2 million people in 2016, the country
realized a Gross Domestic Product (GDP) per capita of 27.363 EUR.
In the world, it is the 12th largest economy by Gross Domestic Product.
In 2016, the country exported products with a net worth of $514 billion.
Challenges facing Italian economy
Major challenges of the Italian economy are high unemployment
rates, political instability and economic stagnation.
Italy also lacks structural reforms.
In 2008, the country faced financial crisis and since
then it has not shown any clear recovery trend.
In the last seven years , the country has realized increased unemployment rates.
In 2013, unemployment was at 12.5% which is the highest
ever recorded in the country and in the same year,
Italy was ranked as the second largest debtor in
the Eurozone and the fifth largest in the world.