The impact of COVID-19 on Italian exports
Even though the COVID-19 pandemic has left a great impact on Italian exports, the pharma industry has saved Italy's economy from collapsing. In fact, Italy is performing better than the rest of Europe.
Despite the impact of the global pandemic, Italy is doing better with exports compared to the rest of Europe - thanks to the pharma industry.
The pandemic has heavily impacted the Italian export sector. According to Trading Economics, exports in 2020 may drop by 13.5%, in comparison to the previous year. ISTAT (National Institute of Statistics) believes this figure will likely increase in 2021, due to the decrease in demand from the country’s main export partners as well as the logistics and transportation disruptions of the global supply chain.
The first indication comes from the fall of foreign orders from the manufacturing sector, which already dropped -23.1 % in the first quarter. In March, Italy registered a decrease of the automotive industry (-40.7%), leather goods (-32.3%), garments (-26.6%), furniture (-25.3%) and machineries and apparels (-21.1%).
However, Italy started the beginning of 2020 with good results in the global market and was doing better than its European competitors in regards to exporting. In fact, in the first two months of 2019, it grew by 4.7% compared to the Spanish, German, and French exports (respectively +4.7%, -0.7%, and -3.2%).
Even if the pandemic put a brake on the Italian economy, we cannot deny that the reforms from the years 2015-17 and the Plan “Industria/Impresa 4.0” gave lasting positive results in terms of GDP, private consumption, employment, technical investments to companies, and manufacturing. In addition to fashion, food, and furniture, Italian exports have now extended to mechanics and the pharma industry, finally adding the two into the lion’s share of “Made in Italy.”
In the first two months of 2020, exports of pharma products grew by about 19.6%. In 2019, Italy registered as the best growth performance among the top 15 world exporters, after being in line with Germany and Switzerland in the last three years. Other sectors that also grew were agri-food and wine, which registered a growth of +11.6% in the first two months of 2020 and was the leading sector along with the pharma industry.
This trend was also positive in March 2020. The export of pharma products increased by about + 32.5%, and food and wine increased + 13.5%. Overall, in the first quarter, Italy’s export increased by 24.1 %, and food and wine increased by 12.3%. These developments allowed the country to reduce the downfall impact on exports in the first quarter (– 1.9%), while German fell by -3.2%, Spanish export by 4.3%, and the French by 7.8%. As a result, despite the significant impact of the pandemic, Italy is still performing better than other European countries.
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