Around 4 million tourists visit Rome's Colosseum each year ©Getty Images
Around 4 million tourists visit Rome's Colosseum each year ©Getty Images

Country spotlight: Italy

POPULATION 60.7m

AREA 301,340 km²

THE HELICOPTER VIEW In political turmoil since the March general election delivered a hung parliament, Italy still leads in tourism, fashion and agriculture – it’s the world’s largest wine producer and fifth most visited country.

ECONOMIC OUTLOOK With the prospect of another election and an increased populist support for exiting the euro, Italy’s economic performance is under threat. Per capita GDP of US$35,900 is already lower than average advanced economies, according to the IMF’s World Economic Outlook, having fallen 5% since 2001 against the EU’s 18% increase. 

BIGGEST INVESTORS Germany, France and the US are Italy’s most important trading partners. The push to promote investment since 2015 has led to several FDI investments.

SUPPLY CHAIN ISSUES In 2015, an Ethical Trading Initiative (ETI) report found labour exploitation, land hoarding and vulnerability to mafia in the Italian tomato supply chain. The report advised UK retailers to map their supply chains to avoid reputational damage.

STRENGTHS Italy is the third largest economy in the Eurozone. SMEs dominate the economic landscape, comprising 99% of businesses. Its luxury goods market is the largest in Europe. 

CHALLENGES Stagnant growth since the economic crisis and the effort to bail out Banca Monte Dei Paschi di Siena has weighed on Italy’s public debt. The economy is also fractured between the industrialised north and the struggling south, which has an unemployment rate of 18%.

BOTTOM LINE The popularity of anti-establishment parties Five-Star Movement and Northern League hasn't helped eradicate economic weakness and lack of progress on much-needed tax and bureaucracy reforms. However, the country's brand new prime minister, Giuseppe Conte, was sworn in on 1 June after a last-minute coalition agreement was reached, ending political uncertainty for the time being. One of the biggest questions now is whether Italy will remain in the Eurozone…

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