Strong recession following the Covid-19 crisis, but worst case avoided

A2

MEDIUM RISK for entreprise

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

The country risk assessments are your North Star metrics to make the right decision for your business and understand the risks in international trade. We have always the best solution for your needs

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GDP USD2001bn (World ranking 8, World Bank 2019)
Population 60.297mn (World ranking 23, World Bank 2019)
Form of state Republic
Head of government Mario Draghi (PM)
Next elections 2023, legislative
  • Well-diversified export sector
  • Strong manufacturing base
  • Low private debt burden
  • Primary fiscal surplus
  • Strong domestic investor base for public debt
  • Elevated policy uncertainty
  • High public debt burden
  • Fragile banking sector
  • Rigid business environment
  • Low R&D expenditure

Trade structure by destination/origin

(% of total)

Exports Rank Imports
Germany 12.2%
1
16.5% Germany
France 10.5%
2
8.7% France
United States 9.6%
3
7.5% China
Switzerland 5.5%
4
5.4% Netherlands
United Kingdom 5.2%
5
5.1% Spain

Trade structure by product

(% of total)

Exports Rank Imports
Machinery and mechanical appliances 19%
1
12.36% Mineral fuels, mineral oils and related products
Road vehicles 8%
2
10.15% Road vehicles
Pharmaceuticals 6.3%
3
9.79% Machinery and mechanical appliances
Electrical machinery and equipment 6%
4
7.67% Electrical machinery and equipment
Plastical products 4%
5
5.75% Pharmaceuticals
The payment behavior of domestic companies is poor and the average DSO is excessive, even though the regulations on late payments are more constraining than the applicable EU rules.

  • Low

  • Medium

  • Sensitive

  • High

  • Payments

  • Court proceedings

  • Insolvency proceedings

  • Payments

  • Court proceedings

  • Insolvency proceedings

Procedural delays and costs are high whilst enforcing court decisions may prove to be a real challenge. Thus, commencing legal action without first establishing a pre-legal collection strategy is unreasonable.

When the debtor is insolvent, debt renegotiation mechanisms have been put into place but they remain mostly unused in practice. Liquidation (bankruptcy) therefore remains the default route, but leaves limited opportunities for unsecured creditors to recover their debt.

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