Overview

The Italian economy is the eighth largest in the world and third largest in the European Union, with a GDP of $2.37 trillion ($40,226 per capita) in 2024. The economy grew slowly despite continued high energy prices, inflation and ongoing geopolitical/economic constraints such as the war on Ukraine, which decreased Italian exports to some established markets. Italy’s economic growth sits at approximately 1% since 2023. Personal loans sit at approximately 7-8%, weakening purchasing power for normal Italian consumers.  Economic growth in both 2025 and 2026 is expected to hover around 1%.

Two-way trade in goods and services between the United States and Italy reached a $137.6 billion in 2024. U.S. exports of goods and services to Italy were $44.4 billion, up 12.4% from 2023, and imports from Italy were $93.2 billion, up 6.8% from 2023.  As a result, the trade deficit with Italy increased to $48.8 billion.

Italy remains the 16th largest market for U.S. exports of goods and services and the sixth largest U.S. export market in the EU, following Germany, the Netherlands, Ireland, France, and Belgium. Export values to the Netherlands (Rotterdam) and Belgium (Antwerp), however, are skewed by the ‘Rotterdam-Antwerp effect,’ in which goods are valued at the port of entry, but then distributed throughout the EU.

U.S. exports to Italy are concentrated in such high-value sectors as oil and gas, precious metals, machinery, and pharmaceuticals. The United States remains by far Italy’s largest non-EU export market with roughly a 10% share of all exports and a 22% share of all non-EU exports. In 2024, the United States was Italy’s second largest destination for exports, after Germany, with U.S. imports from Italy totaling $76.3 billion.

In 2024, the total stock of Italian Foreign Direct Investment (FDI) in the United States totaled $54.7 billion (up from $37 billion in 2020). Italy was also the 10th fastest-growing source of FDI in the United States in 2024. Top industry sectors for Italian FDI include industrial equipment, energy, food and beverages, electronic components, software and IT services, and metals. U.S. affiliates of majority Italian-owned firms operating in the United States exported more than $4 billion in 2022, according to the most recent data available. These companies supported more than 101,000 American jobs.

U.S investment in Italy is concentrated in manufacturing, energy, food and beverage, and software and IT services, with significant industrial relationships in the aerospace and automotive sectors. U.S. FDI to Italy reached $36 billion in 2024 (up from $27.5 billion in 2020). The balance between Italian investment to the U.S. and U.S. investment to Italy signals a surplus of $19 billion.

The current Italian government came to power following elections in September 2022, after the previous “technical government” which formed in February 2021, lost its broad political support. This government has continued to focus on solutions to recover from ongoing geopolitical and economic challenges that began shortly after the invasion of Ukraine.  Secondly, the government continues to focus on implementation of the National Recovery and Resilience Plan (NRRP), a fund of €194.4 billion in loans and grants through 2026 awarded to Italy by the European Commission. Giorgia Meloni, who is the leader of the most-voted party in Italy (Brothers of Italy), has proven an effective “President of the Council of Ministers” (or Prime Minister), and has managed to maintain one of the longest stable governments in the history of Italy. Sergio Mattarella continues to serve as “President of the Republic.”

The NRRP is developed around three strategic axes – digitization and innovation, ecological transition, and social inclusion.  Through NRRP funding, Italy continues its efforts to recover from the economic and social damage caused by the COVID-19 pandemic crisis. The program also has the stated goals of addressing structural weaknesses within the Italian economy and enhancing the capacity of its public administration. Italy received the largest share of the EU’s pandemic recovery fund. To date, the European Commission has transferred to Italy nearly half of the total, but Italy has struggled to spend the funds on schedule. Remaining tranches will be disbursed based on Italy’s progress in fulfilling hundreds of quantitative “targets” and qualitative “milestones” agreed by Italy and the Commission. Italy requested the eighth tranche, €12.8 billion, in June 2025. 

With a population of about 60 million, Italy is the EU’s third largest consumer market. Industrial activity is concentrated in the north: from Turin in the west through Milan to Venice in the east. This region is one of the most industrialized and prosperous areas in the world and accounts for more than 50% of Italy’s national income. Italy’s southern region, or “Mezzogiorno,” is less developed. According to Italy’s Statistics Agency ISTAT, in 2024 the country’s 4.9 million small and medium-sized enterprises (SMEs) — many of them family-owned micro-enterprises – accounted for 76% of employment and one-third of GDP.

Political Environment

Visit the State Department’s website for background on the country’s political and economic environment.