Italy has had a tough time since the financial crisis. While the country has returned to growth after taking a battering through the recession, it has been sluggish to say the least and there remain questions over whether it is on the brink of another downturn.
Its GDP edged up just 1.6% in 2017, while for 2018 the OECD has forecast growth will drop to 1.4%. Unemployment is high, at 9.7% in August 2018. While this is an improvement on previous months, a third of 15- to 24-year-olds are out of a job. Many young people are now leaving the country to work overseas.
Organised crime remains an issue – in 2012 Italy’s employer organisation Confesercenti said that it accounted for about the equivalent of 7% of the country’s GDP. The country’s debt – which is equivalent to more than 130% of its domestic output – remains another challenge.
There are stark regional inequalities: the north is highly industrialised and produces the majority of the nation’s wealth, while the agricultural-focused south is poorer and has high unemployment.
After much uncertainty, in 2018 the anti-establishment Five Star Movement and right-wing League party set up a coalition government.
Looking ahead, the pace of recovery in Italy is expected to be sluggish.
The retail outlook
Despite the backdrop, overseas retailers are still looking to Italy for expansion. Japanese retailer Uniqlo is set to enter the market in 2019, while in the past few years Lego and Under Armour have opened there.
In a bid to preserve family traditions, the government is plotting to axe Sunday trading across large shopping centres. There are concerns that the move could cost thousands of jobs.