Like most European countries, Italy was hit hard by the global recession. Europe's fourth-largest economy reported a contraction in GDP of 4.7 percent in 2008. A modest rebound of 0.8 percent growth in 2009 was enough to buoy Italian business confidence and encourage reinvestment.
One area of growth was in the all important industrial sector of the economy. After more than a year of declines, industrial production staged an impressive rally in 2009. Many economists now believe that Italy is on an upward trend and that its economy will recover from the recession much more quickly than most European countries.
Unfortunately, growing exports and increased production have not been enough to halt the rising unemployment numbers. As of May 2010, the unemployment rate in Italy was 8.7 percent. That number is expected to rise as debt continues to weigh heavily on the government and local businesses like Rome City Apartments
During the recession, Italy's budget deficit nearly doubled as the economy contracted. While only about half the size of the deficits of Greece, Ireland, Portugal and Spain, the budget gap has troubled foreign investors.
Fortunately, Italy has been able to regain some stability this year. The economy is posting modest gains and the deficit is slowly shrinking. More importantly, as we mentioned, business confidence is on the rise and foreign investors are slowly returning.