ITALY'S ECONOMY

Italy's Economy and the Financial Turmoil

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Table of contents

Executive Summary3

Introduction4

Background5

Analysis6

Conclusions9

Recommendations10

References12

Italy's Economy and the Financial Turmoil

Executive Summary

The Italian economic climate has modified considerably from the close of World War II. From an agro based economic climate, it has transformed itself into an industrial nation ranked 8th amongst the top industrial nations. Italy also enjoys the status of being the Great 8 countries or better known as the G-8 developed nations; it is also an active member of the European Union and also participates in the Organization for Economic Cooperation and Development (OECD).

All over the globe, Italy is a well known manufacturers for luxury brands such as, Valentino, Armani, Versace, Prada, Benetton, FIAT, Maserati, Lancia, Ferrari, Alfa Romeo, and Lamborghini, which has helped Italy in building up a niche industry in the international market where there is a growing demand for top notch luxury products.

The 2008 economic downturn lowered Italy's position in the global trade amounts significantly. Its exports have lowered drastically to $369 billion in 2010 from $546.9 billion in 2008. However, the nation's economic climate continued to be comparatively sturdy and ranked 8th throughout the globe for export amounts. The imports for Italy, on the other hand dropped significantly, after the 2008 economic downturn. The results dropped to $358.7 million in 2010 from $546.9 billion in 2008.

Italy's GDP in the year 2008 was US$ 1,813.23 million before the economic downturn; dropping down to US$ 1,771.14 billion in 2010.Nevertheless, the economic climate of Italy continued to flourish and ranked Eleventh best economic climate all around the globe while facing the economic turmoil. Nonetheless, the rate of development in Italy dropped down to 1% in 2008 and to 5% in 2010.

Introduction

The economy of Italy was one of the strongest economies if not in the world than certainly in Europe; the Italian enjoyed a higher growth and per capita income than the average per capita income around Europe. The country is also well known for its high public literacy rate and efficiency and professionalism in the workforce. Italy also enjoys being the fifth most visited place on Earth. This is largely due to the fact, that Italy enjoys a modern lifestyle mixed with the cultural history that makes it one of the most sought after tourist destinations. The total population of Italy according to 2010 stats is approximately 60.206 million, of which 8.7 % are unemployed. However, in recent years the unemployment rate in Italy has seen a steady increase. The rate of unemployment has gone up to 7.5% in 2010 from 6.8% in 2008. Of the total workforce in Italy 4.2 % of the workforce are employed in the farming sector, whereas 30.7 % of the workforce is employed in manufacturing sector and 65.1 % of the workforce is engaged in services sector (2010 Press Releases).

According to the reports of World Bank, Italy is one of the most prominent and secure places for starting a business due to a structured and well regulated industry and financial ...