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The Economy of Italy

Italy has a capitalist economy with high GDP per capita and developed infrastructure. According to both the International Monetary Fund and the World Bank, in 2009 Italy was the seventh-largest economy in the world and the fourth-largest in Europe. Italy is a member of the Group of Eight (G8) industrialized nations, the European Union and the OECD.

In Italy there is a considerable north-south divide, where Northern Italy is dominated by a highly developed and capitalistic economy, whilst Southern Italy is far less advanced and more based on agriculture and tourism.

Italy has few natural resources. With much of the land unsuited for farming, it is a net food importer. There are no substantial deposits of iron, coal, or oil. Proven natural gas reserves, mainly in the Po Valley and offshore Adriatic, have grown in recent years and constitute the country’s most important mineral resource. Most raw materials needed for manufacturing and more than 80% of the country’s energy sources are imported.

The energy sector is highly dependent on imports from abroad: in 2006 the country imported more than 86% of its total energy consumption.

The northern part of Italy produces primarily maize corn, rice, sugar beets, soybeans, meat, fruits and dairy products, while the south specializes in wheat and citrus fruits. Italy is the first or the second largest producer of wine in the world and one of the leading in olive oil, fruits, flowers and vegetables.

Unemployment is a regional issue in Italy – low in the north, high in the south. Chronic problems of inadequate infrastructure, corruption, and organized crime act as disincentives to investment and job creation in the south. A significant underground economy absorbs substantial numbers of people, but they work for low wages and without standard social benefits and protections. Women and youth have significantly higher rates of unemployment than do men.

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