Italy: Economy

Economy

Italy began to industrialize late in comparison to other European nations, and until World War II was largely an agricultural country. However, after 1950 industry was developed rapidly so that by 2006 industry contributed about 30% of the annual gross domestic product and agriculture only 2%. The principal farm products are fruits, vegetables, grapes, potatoes, sugar beets, soybeans, grain, olives and olive oil, and livestock (especially cattle, pigs, sheep, and goats). In addition, much wine is produced from grapes grown throughout the country, and there is fishing.

Tourism is one of Italy's most important industries and a major source of foreign exchange. Manufacturing is centered in the north, particularly in the “golden triangle” of Milan-Turin-Genoa. Italy's economy has been gradually diversifying, shifting from food and textiles to engineering, steel, and chemical products. The chief manufactures include machinery; iron, steel, and other metal products; chemicals; motor vehicles; clothing and footwear; and ceramics. Although many of Italy's important industries are state-owned, the trend in recent years has been toward privatization. The service sector has growing importance in Italy and employs well over half of the labor force.

Italy has only limited mineral resources and has consistently increased its mineral imports; the chief minerals produced are petroleum (especially in Sicily), lignite, mercury, zinc, potash, marble, barite, asbestos, and pumice. There are also large deposits of natural gas (methane), and much hydroelectricity is generated. Italy, however, is still greatly dependent on oil to meet its energy requirements, and most of it must be imported.

Italy has a large foreign trade, facilitated by its sizable commercial shipping fleet. The leading exports are engineering products, textiles and clothing, machinery, motor vehicles, transportation equipment, chemicals, food and beverages, tobacco, minerals, and nonferrous metals. The main imports are raw materials, chemicals, transportation equipment, metals, textiles and clothing, foodstuffs, and petroleum. The chief trade partners are Germany, France, Spain, and Great Britain.

Italy's economy has deceptive strength because it is supported by a substantial “underground” economy that functions outside government controls. Despite significant government progress in its war against organized crime, criminal organizations such as the Mafia and Camorra continue to exert a strong influence in S Italy, at times hindering governmental programs aimed at integrating the region more fully economically and politically into the national scene.

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