Euromoney Country Risk

EUROMONEY COUNTRY RISK

Read the latest analysis on sovereign, geo-political and structural risk

 
Get up to date country risk ratings in 186 countries

Member login



Lost your password?

Euromoney Country Risk

Euromoney Country Risk
List of countries.

Italy Italy

Overview Change score Analyses Experts
 
Sponsored section
Italy

Table of Content


EconomicPoliticalStructural

Euromoney Country Risk editor’s view

Italy replaced its monarchy with a democratic unitary parliamentary republic in 1946.  Since then, the country has undergone rapid economic development and remains central to European economic and political unification.  The current president is Giorgio Napolitano, and the current prime minister is Silvio Berlusconi. 

Italy has a diversified industrial economy.  A large percentage of the country’s income comes from the manufacturing of high quality consumer goods.  The major exports of the country include engineering products, textiles, and clothing.  Italy, however, he is dealing with structural weaknesses due to low productivity in many industries and lack of raw materials and energy resources.  Classified by the World Bank as a high-income country, Italy is also a member of the Organization for Co-operation and Economic Development (OCED). 

Italy – Quick View
ECR score71.2 (Mar 2011)
ECR rank30 (Mar 2011)
Economic
GDP 2010 Q4USD 416,122.97 million
GNI per capita PPPUSD 31,360
FDI inflowUSD 28.98 billion
Inflation 20101.6%
Central bank assetsUSD 5,147,464.17 million
Unemployment rate 2010 Q38.3%
Government deficitUSD 103,697.02 million
Tax revenueUSD 593,356.01million
Political
Government typeRepublic
Recent political crisisNA
Economic freedom score87th
Freedom of information score49th
Corruption perception index67th
Structural
Birth rate9.2 per ‘000
Population balanceUnder 14 – 14%
Population balanceOver 65 – 20.3%
Life expectancy yearsMale 79.1 years
Life expectancy yearsFemale 84.3 years
Mortality rate9.7 per ‘000
Literacy rate98.8%
Internet access51.7%

[Top] Economic Overview

Italy has an industrialised economy. Its major trading partners are USA, China, Japan, Turkey, and Russia. Most of Italy's economic activity is based on the manufacturing and processing of goods.

Gross domestic product (GDP)

The gross domestic product for 2010 Q4 was EUR 305,985 million, increasing 0.05% over the previous quarter.

 

Italy GDP and growth rate

(Source:istat.it)

GDP per capita at PPP

The GDP per capita at purchasing power parity (PPP) was USD 29,418 billion in 2010, as compared to USD 29,068 billion in 2009, thus increasing by 1.20%.

Alternatively GDP per capita in 2010 was USD 33,829 billion declining 4.53% from the previous year.

 

Italy GDP per capita at PPP

(Source: dfat.gov)                                                                               

Gross domestic product at PPP

 

Italy GDP at PPP

Source: dfat.gov

Italy's Gross domestic product at PPP increased from USD 1721.2 billion in 2006, to USD 1813.2 billion in 2008.  However, it declined in 2009 to USD 1,737.70 billion. The economy rebounded in 2010, increasing 1.92% to USD 1771.1 billion

Gross national income (GNI) per capita at PPP

In 2009, the nation’s gross national income (GNI) per capita, PPP was USD 31,360.

(Source: dfat.gov, worldbank)

Income tax rate

Income tax on individual incomes in Italy varies from 23% to 43%. Additonally, the country’s direct taxation includes a regional tax of 0.9% to 1.4% and a municipal tax of 0.1% to 0.8%.

 

Tax rate for individuals (EUR)

Tax (%)

0 - 15,000

23

15,001-28,000

27

28,001-55,00

38

55,001-75,000

41

75,001 and over

43

 (Source: taxrates)

Corporate tax

Standard corporate tax in Italy is 31.4%.

(Source: taxrates)

Inflation rate

The inflation rate in Italy has witnessed fluctuations, varying from a high of 3.5% in 2008 to a low of 0.8% in 2009.

Italy Inflation

(Source:bancaditalia.it)

 FDI inflow

From 2005 to 2007, FDI inflow increased from USD 19.64 billion to USD 40 billion. However, in 2008, FDI inflow declined to USD 15.44 billion, but further in 2009 it increased 87.7% to USD 28.98 billion.

(Source: worldbank) 

Italy FDI net inflows

Portfolio investments

 

Portfolio Investments (EUR million)

 

Dec. 2010

Dec. 2009

Equities

2,254

5,114

Debt securities

-11,639

227

 (Source:bancaditalia.it)

Banking sector assets

In 2009, the Italian banking sector assets were:

 

Italian banks assets for 2009

Assets

Amounts (EUR million)

Cash

11,647

Debt securities ( including government securities)

228,532

Loans

1,760,751

External assets

324,809

Shares and other equity

151,583

Claims on resident MFIs

(Loans, Securities, and Other assets)

 

1,214,646

Total Assets

3,691,968

(Source: bancaditalia.it

[Top] Financial Indicators & Government Financial

Consumer price index

 

Italy Consumer Price Index

 (Source: istat.it)

 The consumer price index in 2010 steadily increased from 138.5 in January to 140.9 in December.

 Wholesale price index

Italy Wholesale Price Index

(Source: istat.it)

The Wholesale Price Index, also known as the Producer’s Price Index (PPI), is a measure of inflation at the wholesale level. In 2010 PPI rose steadily, reaching 112.3 by the end of November.

(Source: istat.it)

Interest rate

 

Interest rates 2010

 

Loans

Deposits

Month

Households

Non-financial institutions

January

4.64

3.20

0.66

February

4.58

3.16

0.63

March

4.55

3.12

0.63

April

4.53

3.10

0.61

May

4.47

3.08

0.59

June

4.35

2.97

0.60

July

4.36

3.01

0.61

August

4.37

3.06

0.63

September

4.36

3.11

0.65

October

4.34

3.11

0.66

November

4.36

3.16

0.68

 (Source: bancaditalia.it)

Government expenditure

Italy Government expenditure

(Source: bancaditalia.it)

In 2009, government expenditure substantially increased by 6.28% compared to 2008.

 Official exchange rate

Italy Exchange rate

(Source: mef.gov.it)

USD per EUR exchange rate for 2009 valued at 1.39, decreased over the 2008 value of 1.47.

Government finances

Sovereign Debt Dynamics 

Fiscal Balance

The country witnessed a considerable increase in the fiscal deficit from EUR 23,191 million in 2007 to EUR 80,800 million in 2009. However, in 2010 the government estimated the fiscal deficit to decrease by 3.32% over 2009.

Italy Fiscal balance

(Source: mef.gov.it)

Total revenue

The country’s total revenue steadily rose from 2005 to 2009, however, a minor decrease was noted in 2008. In 2009, revenue from direct taxes was a major contributor, accounting for 14.6% of the total revenues.

Italy Total revenue

(Source: bancaditalia.it)

Tax revenue

 

Italy Tax revenue

Tax revenue decreased from 2007 to 2009, but was expected to rise to EUR 446,981 million in 2010. The country’s tax revenue, as a percentage of GDP, was 29.1% stable of in 2009.

(Source: mef.gov.it)

Current account balance

The current account balance of Italy registers a deficit of EUR 9,955 million as of 2010 Q3.

Italy Current account balance

(Source: bancaditalia.it)

Balance of payment

 

Balance of payments ( EUR billions)

 

2010 Q3

2009 Q3

Current Account

-9,955

-4,320

Capital Account

-114

-110

Financial Account

21,647

-43,383

Errors and omissions

-11,578

47,813

 (Source:bancaditalia.it)

[Top] Labour Force and Employment Overview

Labour force

Labour force in Italy was recorded at 24,970,000 people in 2009, decreasing 0.5% over 2008. Italian nationals constituted about 91.44% of the labor force, while foreigners accounted for 8.56%.

 

Italy Labour force (Gender)
Italy Labour force (Nationality)

(Source: bancaditalia.it)

Labour force participation rate

In 2009, the labour participation rate for those between 15 and 64 years was recorded at 62.4%, showing a decline of 0.6% compared to 2008.

(Source: bancaditalia.it)

Unemployment rate

Italy Unemployment rate

(Source:bancaditalia.it)

The unemployment rate in November 2010 was 8.7% of the total population. Specifically, the unemployment rate for males is 7.8%, while for females it is 10%.

(Source: istat.it)

Employment

From 2008 (Q3) to 2010 (Q3), the growth rate has witnessed positive rise only in Q1 2010.

 

Italy Employment

(Source:bancaditalia.it)

Level of unionization

The major labour welfare unions in Italy are: Italian General Confederation of Labour, Confederation of Trade Unions in Italy and Italian Workers Union.

(Source: fedee)

[Top] Political Stability

Government stability

Silvio Berlusconi serves as the current Prime Minister of the country.

The political parties in Italy are:

Centre-Right governmentparties 

  • Popolo della Libertà (PdL – People of Liberty)
  • Lega Nord (Northern League)

Opposition parties

  • Partito Democratico (PD - Democratic Party)
  • Italia dei Valori (IdV - Italy of Values
  • Unione di Centro (UDC- Union of the Centre)

(Source: fco.gov.uk, civitas.org.uk)

Regulatory environment

Country’s economic freedom score is 60.3, ranking it as the 87th freest country in the 2011 Index. Furthermore, Italy ranks 36th out of the 43 countries in the Europe region. 

 

 

Italy Economic Freedom Indices

(Source: heritage.org)

Corruption perception

 
The Corruption Perceptions Index (CPI) is a survey to measure the perceived level of corruption across countries worldwide.  Italy slipped from 63th in 2009 to 67th in 2010, with a score of 3.9 and confidence range of 3.3 to 5.1, indicating the increased levels of corruption in the country.

Freedom of information

World Press Freedom Index 2010 ranks Italy at 49th with a score of 15, indicating that media in Italy minimly restricted. The country’s press system is highly regionalised and newspapers are privately owned.

There are more than 2,500 commercial radio stations.

Major newspapers in Italy are:

  • Corriere della Sera
  • La Repubblica
  • IL Messaggero
  • La Stampa
  • IL Sole 24 Ore

 (Source:rsf.org,BBC)

Judicial system

In Italy, Constitutional Court isthe highest judicial authority, consisting of 15 judges of which, 5 are appointed by the president, 5 elected by the parliament and 5 elected by the administrative supreme and ordinary courts.

In addition to constitutional court, the other court is Court of Cassation.

(Source: rogerdarlington.me.uk)

[Top] Demographic Overview

Population

The total population of Italy for 2010 was recorded at 60.34 million, increasing 0.49% over 2009.

(Source: istat.it)

Italy Population by gender
Gender ratio

 

In 2010, males accounted for 51.5% of the total population. Hence, the gender ratio in the country is not balanced, there are about 107.4 males for every 100 females in the country.

In 2010, the population in Italy of below 14 years was 14% of the total population, whereas people in the age groups of 15 to 64 years and 65 years and above constituted for 65.7% and 20.3% respectively. Furthermore, the median age of the country is 43.5 years.

(Source: istat.it, UN)

Mortality rate

In 2010, the mortality rate in Italy was registered at 9.7 per 1,000 live births. The average life expectancy for men is 79.1 years and for females it is 84.3.

Migration and urbanisation

In 2010, the net immigration rate was 6% and total migration rate is recorded at 4.8%.

Source: (istat.it)

The urban population growth rate from 2005 to 2010 was 5.4%, while the rural population growth rate was 3.4%. The total population growth rate was 5.7%.

Ethnicity

The major ethnic group in Italy is Italian, however there are also German, French, Slovene, and Albanian ethnicities.

Source: (istat.it, UN, state.gov)

Human development index (HDI)

The country ranks 23rd out of 182 countries on the Human Development index 2010 conducted by the United Nations. The HDI provides a composite measure of three dimensions of human development: living a long and healthy life (measured by life expectancy), being educated (measured by adult literacy and gross enrolment in education).

(Source: UNDP)

[Top] Soft Infrastructure

Education/literacy rate

The country’s literacy rate is 99%. Additonally, compulsory education is from six through fifteen years of age.

(Source: unicef.org)

Education resources

The education system in Italy includes a pre-higher and a higher education systems.

The higher education system includes:

  • Universities
  • University institutes
  • Technical universities
  • Higher institutes

The university system consists of 89 university institutions including 55 state universities, 17 non-state, legally recognized university institutes, 12 higher schools or institutes regulated by special legislation, 3 technical universities and 2 universities for foreigners.

(Source: euroeducation)

Healthcare resources

The healthcare system in Italy has maintained a high standard of afforadable medical assistance, provided by the country’s National Health System, the Servizio Sanitario Nazioanale’.

Furthermore, it is mandatory for everyone in Italy, or anyone coming to Italy to have a health insurance, without which a permit to stay in the country is restricted..

(Source: allianzworldwidecare)

[Top] Hard Infrastructure

Mass public transit

Most of the mass public transport in the country is by roadways, through Buses and Cabs.  However, there are also ferries, railways and airways.

Ports

There are 134 ports in country, including: Port of Napoli, Port of Genoa, Port of Palermo, Port of Bari, Catania, and Port of Trieste.  

(Source:world port source)

Airports

There are about 110 airports in the country. Some of the major airports are:

 

Town

Airport name

Runway length (ft)

Alghero

Fertilia

9,800

Ancona

Falconara Mil

9,800

Bari

Palese Macchie

8,000

Bologna

Borgo Panigale

8,000

Brescia

Montichiari

9,800

Brindisi

Casale Mil

8,600

Cagliari

Elmas Mil

9,200

Catania

Fontanarossa

8,100

Catania

Sigonella Mil

8,000

Milan

Linate

8,000

Milan

Malpensa

12,800

Naples

Capodichino Mil

8,600

Olbia

Costa Smeralda

8,000

Palermo

Punta Raisi

11,200

Parma

Parma

6,200

Rome

Fiumicino

12,700

Torino

Caselle

10,800

Trieste

Ronchi Dei Legionari

9,800

Verona

Villafranca Mil

9,700

(Source: Air charter world)

Telecommunications networks

In 2010, the total number of internet users was about 30 million, increasing 1.8 million from 2008.

 

Euromoney country risk banner
 
All material subject to strictly enforced copyright laws.
© 2017 Euromoney Institutional Investor PLC.