Italy remains a key player in the European Union’s economic landscape, holding its position as the third-largest economy in the bloc and the eighth-largest globally. Although its gross domestic product slowed to 0.9% in 2023, down from 4% the previous year due to rising inflation and the end of energy crisis relief measures, the country has made steady progress in reducing its debt-to-GDP ratio, dropping from 155% in 2020 to 141.7% by 2022. Italy’s top industries span a dynamic range, from its world-class manufacturing and iconic fashion and textiles sectors to its rich agrifoods, cutting-edge automotive innovations and a rapidly evolving energy sector. With bold reforms and fresh waves of investment, Italy is gearing up to reclaim its stride, positioning itself as a dynamic and resilient economic leader ready to shape both Europe’s future and the global stage.
Italy’s National Recovery and Resilience Plan, backed by $217 billion in EU funding, is designed to accelerate digital transformation, the energy transition and key business reforms until 2026. In 2016, Italy introduced its Industria 4.0 initiative aimed at digitizing its traditional industries and fostering the growth of cutting-edge sectors such as the industrial internet of things, cloud manufacturing, advanced automation and additive manufacturing. The plan includes a $14.9 billion allocation in tax credits to encourage investments in capital assets, intangible goods, research and development and workforce training. These forward-thinking economic strategies aim to harness Italy’s strength as Europe’s second-largest manufacturing powerhouse, setting the stage for lasting growth and unlocking new waves of investment that will shape the nation’s future.
Tourism continues to be the lifeblood of Italy’s economy and one of its most dynamic industries, contributing roughly 13% to the national GDP and providing jobs for a quarter of the workforce. The country broke records in 2023 by welcoming over 134 million visitors to its diverse range of accommodations. In the first half of 2024, the allure of Italy’s iconic cities, charming hidden villages and world-renowned cuisine saw a 12% year-on-year increase in arrivals. US visitors remain the country’s top foreign participants, with more than 4 million American visitors entering the country in 2023 and spending around $7 billion. To keep pace with its thriving tourism industry, Italy is welcoming a wave of foreign investment to enhance its key infrastructure, from modernizing hotels to expanding airports and upgrading ports to ensure visitors can explore the country’s treasures with ease and comfort.
Italy remains a key player in fostering international collaboration and strengthening its global influence through close economic partnerships, particularly with the USA. In the wake of the pandemic, foreign direct investment in Italy has skyrocketed, hitting a record $32.2 billion in 2022, signaling renewed confidence in the nation’s economic potential. The USA remains a key partner in mutual economic growth, with US multinational companies leading in terms of foreign investment into Italy, making up 19.1% of its sales, contributing 20.1% to its added value and accounting for 23.7% of local research and development spending.
Italy is currently the 19th largest market for US exports of goods and services and the sixth largest US export market in the EU. The Mediterranean nation took center stage in June 2024 as it hosted the G7 summit, marking a significant achievement for Prime Minister Giorgia Meloni. The gathering brought together global leaders, including US President Joe Biden, who collectively voiced their support for peace initiatives and a commitment to fostering economic sustainability.