1. Strong Economic Fundamentals

Italy continues to be an attractive destination for foreign direct investment, demonstrating remarkable economic resilience and adaptability amidst global challenges.

Size of Economy: Italy is the 3rd largest economy in the Eurozone and 8th in the world.

Robust GDP Growth: After a strong recovery following the 2020-21 global health crisis, with output levels returning to near pre-pandemic levels by late 2021, Italy's Gross Domestic Product (GDP) grew by 1.0% in 2023. Projections indicate continued positive growth for 2024 and 2025, reflecting a generally expanding economy. Current trends suggest this upward trajectory is being maintained, driven by broad-based improvements across various sectors including consumption, investment, and trade.

Inflation Under Control: Inflation has been successfully moderated, with the average Harmonised Index of Consumer Prices (HICP) inflation for 2024 remaining well-aligned with targets. The declining trend in inflation observed across the broader Eurozone has also been evident in Italy, contributing to a stable economic environment.

Strengthening Labor Market: The labor market has shown consistent strengthening, with the unemployment rate projected to decline significantly through 2024 and 2025. These improvements, coupled with rising real wages over the past year, are bolstering domestic demand, which is anticipated to be a key engine of growth for the coming period.

Improved Credit Rating: At the end of May 2025, Moody's confirmed Italy's Baa3 rating and upgraded its outlook from stable to positive, citing improved fiscal prospects within a stable domestic political environment. This positive revision also boosted the credit ratings of numerous Italian banks. The improved credit rating has been reflected in growing international investor interest in Italian government debt securities, with foreign-held debt showing a notable increase over the past year. The spread between Italian BTP and German Bund has also steadily declined over the past year, indicating increased market confidence.

2. Investment Inflows and Project Confidence

Foreign Direct Investment (FDI) inflows to Italy amounted to $18.2 billion in 2023 (UNCTAD). The first half of 2024 saw $7.6 billion in total investments (OECD). Despite these value fluctuations, the number of FDI projects in Italy nearly doubled in 2023 compared to pre-pandemic levels, rising from just over 100 to more than 200 annually (EY Attractiveness Survey 2024). Between January 2003 and November 2022, Italy attracted over 3,500 FDI projects, representing a 1% share of global FDI. The majority of these projects (87.7%) are new investments, demonstrating sustained confidence in the Italian market.

3. Key Investment Sectors

Recent industry analysis highlights Italy as an increasingly attractive destination for investment. Foreign investors made substantial commitments in 2024 in several key sectors. Manufacturing remains the dominant sector for FDI stock, with significant capital expenditure in high-tech areas like semiconductors in 2024 but significant flows are also directed towards emerging service industries. 

Manufacturing

• Pharmaceutical: Showed significant growth in project numbers in 2023, maintaining its consistent attractiveness. Italy is 2nd in Europe for the number of pharma companies, with 52% growth in exports over the last five years (€48 billion value in 2023). Investments over €2 billion in Italian R&D were recorded in 2023.

• Machinery and equipment : Also experienced significant growth in project numbers in 2023.

• Luxury boating: Italy ranks 1st for superyacht production globally and is the largest contributor to the textile and clothing industry in the EU in terms of employment (+24%), turnover (36%), and export (+30%).

• Aerospace:Italy holds a significant position as a key player in the aerospace, defense, and security sectors. It is recognized as a major European hub, with a robust ecosystem of companies, research centers, and specialized expertise contributing to advancements in this high-tech industry.

• Agrifood: Experienced +5.7% growth in exports in 2023, with a €3.88 billion Italian organic market value. Italy is 1st in Europe by numbers of PDO & PGI. 

Services

• Logistics: Experienced a notable resurgence in 2023, accounting for 16% of investment projects and a 46% increase in project numbers from 2022. Italy serves as a gateway for 500 million European customers and for 270 million customers from Northern Africa and the Middle East, playing the role of an Euro-Mediterranean Logistics Hub. 

• Renewable Energy: Italy is making significant strides in renewable energy, notably in offshore wind with substantial potential (84.3 GW projects under development). A landmark Consolidated Act on Renewables (Legislative Decree No. 190/2024) has been enacted to simplify and speed up permitting, with "Suitable Areas" and "Acceleration Zones" being identified. This reform is operationalizing earlier legislation aimed at allocating 80 GW of additional renewable capacity by 2030. This ambitious agenda is robustly supported by over €16 billion in EU and national funding, including the Just Transition Fund and REPowerEU, demonstrating strong financial incentives for investment.

• Green Technologies: Italy's green technology sector is a vital and expanding part of its economy. As of 2024, a large percentage of Italian businesses have invested in green products and technologies, driving significant growth in green-related employment. The sector's economic contribution has notably increased, with Italy demonstrating leadership in waste recycling and a high share of renewable electricity. Ranked as the fourth-largest producer of renewable energy technologies (RET) in the EU in 2023, Italy is also a top global exporter. Current trends point to continued strong growth and innovation in this sector.

• Telecommunications: Continues to attract significant investment, highlighted by major cross-border M&A deals in 2024.

• Data Centers: Milan is emerging as a dominant hub with significant foreign investment and projected capacity growth.

• Software and IT Services: Attracted significant venture capital investment in 2024.

• Data Economy: Italy is 1st in Europe for the number of enterprises using Cloud computing services, with €3.7 billion expenditure in Public and Hybrid Cloud (+24% vs 2022).

• Design: Italy is 1st in the EU for the number of companies (41,908), employment rate (+19.7% in 2023), and added value (€3,138 million).

• Tourism: Italy is 1st for UNESCO World Heritage Sites (60 in total).

4. An Exporting Country

In 2023, Italian exports reached a record value of US$ 678 billion, marking a 2.8% increase compared to the previous year, solidifying Italy's position as the world’s 6th largest exporter98. Italy is:

• 1st largest exporter in marine industry 

• 1st largest world wine exporter by volume, 2nd by value 

• 2nd largest European metal products exporter 

• 3rd largest world home furniture exporter 

• 2nd largest exporter of Leather materials, Fashion and Accessory 

• 2nd largest world footwear exporter 

• 2nd largest European exporter in mechanic industry 

5. An Attractive and Innovative Country

• Italy confirms itself as a first class top 3 global position in the 2024 Anholt-Ipsos Nation Brand Index. Eighty eight per cent of foreign-controlled companies believe the country's attractiveness will increase or remain stable.

• In 2024, Italy has risen 1 position (from 14 to 13) in the EY biannual ranking regarding the attractiveness of investments and development opportunities in the renewable energy sector, as shown in the Renewable Energy Country Attractiveness Index (RECAI).

• Italy rises three spots to 8th place in the 2025 Kearney FDI Confidence Index, signaling growing investor confidence amid a global shift favoring stability in developed markets. Domestic economic performance and the efficiency of legal and regulatory processes are now the top two factors influencing FDI decisions.

• Italy is 10th worldwide for effectiveness of innovative ecosystem and performs above the European average in Human capital and research performance.

• Italy is among the major EU countries for patents’ growth rate [+3.8% vs the EU average of + 1.4%]. It ranks 4th worldwide by success rate of patent applications, 1st worldwide for publications and 3rd for citations per 1,000 researchers. Italy performs above the European average in Human capital and research performance.

6. A Talent Pool

Italy boasts a highly skilled and innovative workforce, crucial for any successful investment.

• Over 1 million university graduates in Italy (40% in STEM disciplines) in the last 3 academic years.

• According to the QS World University Ranking by Subject 2024, Italy is the ninth best higher education system globally in terms of placements in the top 10 positions by subject. Notable institutions include Sapienza University of Rome (Classical disciplines and Ancient History 1st, Archaeology 10th), Polytechnic of Milan (Arts and Design 7th, Mechanical, Aeronautics and Manufacturing Engineering 9th), Scuola Normale Superiore (5th in the world for Classical disciplines and Ancient History), and Bocconi University (1st in EU for Social Sciences and Management, 7th for Marketing, 9th for Business Administration and Management).

• ITS (Higher Technical Institutes) are post-diploma highly specialized technological institutes, jointly implemented by education institutions and industrial players, producing more than 7,000 highly specialized technicians per year in various subjects like Mechanical Technologies, ICT, Design, and Innovative Technologies for Tourism & Cultural Activities.

• Italy has various Competence Centers for Industry 4.0, including Meditech 4.0, Cyber 4.0, ARTES 4.0, Start 4.0, CIM 4.0, Made Competence Center 4.0, SMACT, and BI-REX, acting as a learning and innovation dissemination hubs for companies of all sizes and as a natural starting point to engineer the use of new technologies and related incentives in production processes.