Has Italy’s economy turned the corner?

Italy’s FTSE MIB stockmarket index has returned 23% so far this year, more than double the FTSE 100’s performance over the same period.  

Restaurant in Rome
Italy's economy has barely expanded since 2000
(Image credit: © iStockphotos)

Investors have long despaired of Italy, says Miles Johnson in the Financial Times. The economy has barely grown since 2000. “Anyone who purchased Italian equities at the start of 1999… has lost a fifth of their investment.” But now things are looking up under prime minister Mario Draghi’s unity government.

Italy’s government debt-to-GDP ratio of 155% is the second-highest in Europe, behind only Greece. For now, massive bond buying by the European Central Bank (ECB) is keeping borrowing costs low: at 0.85% Italy’s ten-year government bond yield is barely higher than the UK’s. But a brief spike in the gap with German bond yields earlier this month was a reminder that Italian debt is underpinned by the ECB’s stimulus. To solve its debt problems Italy needs growth.

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Markets editor

Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019. 

Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere. 

He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful. 

Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.