Economic Growth in Italy and What it means for international students

Known as the world’s ninth-largest economy, Italy is the heart and soul of the luxury goods manufacturing market. The services sector accounts for 65% of Italy’s GDP but only 30% of the people in Italy are offered employment annually across its in-house industries. The manufacturing sector covers the remaining 25% of GDP in Italy, mostly run by small-scale enterprises or by heirlooms, yet holds expertise in areas of textiles, machinery, furniture and industrial design manufacturing. This, in turn, contributes towards 24% of major exports to countries like Germany and France, the USA and other countries which depend on Italy at large.  

Due to the ongoing war between Russia and Ukraine, Italy’s imports have fallen to a great extent since it relies on Russia for its fuel. Further, the economy of Italy slowed down by 2% during the COVID-19 restrictions and the tourism sector came crashing leaving the economically distressed and difficult to recover with the increase in inflation by at least 2.3% in 2021. But by the end of 2021, Italy's economy was able to recover its losses by 6.5%. For 2023, it is expected that Italy's economy would average around 2.3% in comparison to 4.1% in 2022. The growth in the economy for the year 2022 is predicted around 2.5%.

Check: Popular Jobs in Italy

Economic Overview of Italy 

The economic overview of Italy is based on various parameters that go into calculating the GDP of a country, for instance, the annual sales, manufacturing, consumption, import and export and the final inflation rate. The year 2019 sees a setback and has witnessed the worst hit in comparison to the previous years, read on for more stats:   

Some key takeaways from the above-given data covering the economic overview of Italy in comparison to the years 2019, 2020 and 2021 are as follows: 

• The population of Italy has declined by 0.38% from 2019 to 2020 and by 0.44% from 2020 to 2021 after the COVID-19 pandemic. 
• The per capita GDP of Italy reduced by 5.46% in 2020 from 2019 but there was a boom in the second half of 2021 recording a whopping increase of 11.67% after the borders opened after a pandemic for tourists. 
• The GDP of Italy again saw a diminishing economy by 5.9% from 2019 to 2020, but an increase of 10.95% was also noted in the year 2021 from 2020. 
• Since the economy of Italy was severely hit in the year 2020, recording a -9.03% decline, only 2.39% was recovered in the year 2021 in terms of annual GDP growth. 
• Industrial growth improved in Italy by 2% after 2020, and as of October 2021, the growth is expected to reach another 3%. 
• Retail sales have increased since 2020, in 2021 the sales have reached a new pinnacle of 34% in Italy. 
• The unemployment rate in Italy stands worse from 2019 to 2020 and even worse for 2021, at present accounting for 9.83% in 2021.

What does this mean for international students? 

The unemployment rate in Italy is a concern for international students since the rates have increased by 0.53% in 2021 from 2020. One of the major reasons why an international student would choose to study in Italy is because he/she would look for full-time job prospects to support themselves and calculate their ROI too. But the declining rates of employment, plus the unending war between Russia and Ukraine is another setback for Italy's economy. 

Another reason for Italy’s economy slowing down is the increase in the inflation rate plus the out-of-proportion increase in the Rouble has further created doubt about whether or not to choose Italy as a study destination. Students choose Italy because it is cheaper in comparison to other European nations, but there seems to be a big gap here which is expected to be covered up through Italy’s Recovery and Resilience Plan which is expected to create around 240,000 jobs by 2026.

At present, Italy is trying to fight harder to survive its economy on its previous years' trade surplus. Still, the increasing demands for fuel and other necessary items from Russia are only making it a little more difficult to cope. Thus, international students are required to exercise caution in terms of their calculations like the cost of studying in Italy along with the cost of living in Italy if decided to pursue higher education at Italian universities only.

At present, there are 5,000 students studying in Italy from India, and it is likely that the numbers would go up in 2023 and 2024. The reason why more and more Indian students would take up education in Italy is that it's cheaper than other European countries secondly, Italy in collaboration with India plan to create more opportunities for Indian students to work and research in Italy through various exchange programs. Plus, the manufacturing and retail sales sector in Italy are recording a positive growth post-pandemic, hence it would not be incongruous to say that better career prospects and job opportunities await international students in Italy in the upcoming five years. 

Read: International Student Guide for Italy