Since 2019, Italy has been “by far the strongest-growing” of Europe’s major economies, says Jeremy Warner in The Telegraph. The eurozone’s third-largest economy was hit hard by Covid, but growth has since rebounded. Real GDP per head is almost 5% higher now than it was in 2019. The growth spurt partly reflects one-off factors. Italy has been the biggest single beneficiary of the EU’s massive post-pandemic recovery programme.
But under prime minister Giorgia Meloni, who has adopted a pragmatic approach, the country is also enjoying a rare period of political stability and coherent policymaking. Indeed, it sometimes feels as though it is Britain, with its revolving door of prime ministers, that has become the new Italy, “only without the sun and la dolce vita”.
Milanese magic
The sun has been shining on Italian stocks. Powered by strong bank earnings and a robust luxury sector, the FTSE MIB index of Milan’s 40 leading stocks has gained 30% in a year. The index is up by 12.5% in 2024, says Piero Cingari in Euronews. And on a price/earnings (p/e) ratio below ten, Italian stocks are cheap and trade at a discount to their three-year average of 13. Italy therefore remains “an appealing opportunity”.
Italy hardly wants for recognisable brands, but its stockmarket is a comparative minnow, says The Economist. Italian firms struggle to grow into global giants. The country’s entire equity market is worth less than €800bn, barely twice the value of French luxury conglomerate LVMH alone. By market value, the Milan market is worth only 31% of local GDP, compared with 53% in Germany and 89% in the UK.
