Economics Assignment: COVID-19's Impact on Italy's Economy and Society

This report analyzes the profound impact of the COVID-19 pandemic on the Italian economy and society. The essay explores the causes of the economic downturn, including the rapid spread of the virus and the resulting lockdown measures. It details the macroeconomic challenges, such as rising unemployment, declining GDP, and disruptions to trade and industrial production, particularly within the SME sector. The analysis covers the impact on various industries, including automotive, travel, and healthcare, and examines the government's responses, such as lockdown policies and calls for increased production of medical equipment. The report concludes by emphasizing the devastating effects of the pandemic on the Italian economy and the need for effective measures to mitigate the crisis. The study references various sources, including WHO, Eurostat, and other economic reports to support the analysis. The report highlights the crucial role of SMEs and the need for financial support to help them during this crisis.

Economics
Impact of COVID-19 on Italy economy and society

Economics 1
Impact of COVID-19 on Italy economy and society
Presently, macroeconomics events generally take place around us on daily basis. The aim
of the paper is to provide the connection between what you learn from the different economic
models and concepts with the real-life events that are happening around. In the recent weeks,
there is presence of COVID-19 (Coronavirus) has affected the economy of entire world. This
virus is spreading across the world but the most affected country from this virus is Italy. The
essay includes the causes of the problem, macroeconomic challenges, impacts, as well as policies
by the government of the country.
In the research, this has been found that coronavirus disease caused by the newly
developed coronavirus. Most of the people infected with the virus will find the moderate
respiratory illness as well as recover without looking for the special treatment. The transmission
is spreading across among people easily which is dangerous for life (WHO, 2020). The spread of
the virus in Italy is increasing because they get transmitted easily which is the major reason
behind the spread of virus at high pace. The symptoms of this virus are slow due to which the
people who are infected with this don’t get to know about it and they come into the transmission
with different people. Those people further spread the virus which becomes dangerous for the
life of numerous people in society.
Across the world, this has been witnessed that Italy is considered as the most affected
countries with the coronavirus outbreak as the number of the cases are rising rapidly in the
country. As per the research, the country has the death toll from the COVID-19 is 5,000 with the
sharp growth in the past few days (WHO, 2020). Considering the spread of the virus among the
people is so quick that the entire operations are stopped. The virus has a devastating impact on

Economics 2
the Italian economy as an industrial output is declining. The fact can’t be denied that the Italy has
a considerable position when it comes to the value of the industrial production in the EU
members states. For example; according to the data of Eurostat, over than 75% of the value of
the sold industrial manufacturing in EU was 28 was produced by 6 member states consists of
Italy, Germany, UK, Spain, France and Poland with 16%, 28%, 9%, 8% and 5% of the overall
EU respectively. The company is accounted for approximately 2.4% ($2.1 trillion) of the global
GDP in the year 2018 (Orion Market Research, 2020).
In the articles, this has been found that as per the International Trade Administration
(ITA), Italy is considered as the third- largest destination for the exports in the market of US that
is totalled of $50.1 billion value of the country’s exports to the US in the year 2018.
Furthermore, Italy’s SME sector is wide due to which this sector is able to contribute
approximately one-third of the value to the economy of the country. Along with this, this sector
is providing the half of the employment within the country but due to the virus operations are not
taking place (Hub staff report, 2020). The structure of the Italy economy is depended on the
SMEs which is possible with the spread of the coronavirus is influencing the economy of the
country. It has been witnessed that the SME generally remain depended on the finances and
loans in order to attain the needs of the business. Due to the exposures facing by the financial
sector of the Italy during COVID- 19, it has been found that the SMEs operations are negatively
influenced which leads to the major decline of the economy of country. In the research, this has
been found that the major challenge for the government is to control this spread because this can
take away the lives of people (World Economic Forum, 2020).
In the research, the classification of the industry is presented which shows that the
economy of the country is segmented into different industries which include automobile, food

Economics 3
and beverages, aviation, retail, travel and tourism, healthcare and many others. However, due to
the rise in the spread of the COVID-19, the government of the Italy has adopted the strategy of
the Lockdown through which they can reduce the transmission that is spreading quickly. Thus,
considering the change in the policy by the government, the major automobile companies have
taken the decision that they would not be performing operations and there would be temporarily
shut down of their factories with the motive to bring the decline in the spread of coronavirus and
saving society. However, there are many researchers who said that the government was supposed
to take this step early which might have reduced the effect of virus. Presently, there are wide
range of companies who are concerned about their employees and themselves due to which they
are not performing the operations. For example; In Italy, Ferrari S.p.A. has postponed
manufacturing for the two weeks consider the orders of the government.
The entire research shows that this leads to macroeconomic challenges which are needed
to be faced by the entire Italy. These challenges consist of high unemployment due to stop of
production, there is major decline in the economic growth of the country, the trade cycle of the
country has been stop, and balance of payments is stick (Statista, 2020). All these challenges are
witnessed and the country is getting financially weak which is major issue. The government is
making the maximum utilization of their funds so that they can provide the help to the people
who are sick and affected.
Presently, the economy of the country is declining and it is considered as one of the
financial crisis for the company. On this the government of Italy is trying to control the spread
because this is the only way through which they can finish this and can come back to the pace.
However, the healthcare sector is at the high demand for the supplies, hospital and equipment’s
in order to save people (Pisano, Sadun & Zanini, 2020). Thus, this is one of the reason due to

Economics 4
which the Italian government has asked the company like Siare Engineering International Group
s.r.l., General Electric Co., Honeywell, 3M, General Motors and Ford Motors and other to
proceed with the production of the ventilators of 160 to 500 on monthly basis and other health
care equipment’s which is needed to fight against the virus. This reflects that the production of
the goods and services has been stopped and there is production of health services which are
required to the government in this situation where people are suffering extreme difficulties
among society.
At the end of the essay, this can be concluded that spread of COVID-19 has affected the
economics of Italy badly which needs the attention of the government. It is understood from the
analysis that the transmission of the virus is required to be stopped due to which the government
has taken the necessary steps which help people suffering from these diseases. The government
has spread the order of lockdown so that they can stop and try to recover the number of cases.
Considering all these order, the entire operations of Italy are stopped which affect the
macroeconomic factors of the country.

Economics 5
References
Hub staff report. (2020). Understanding Covid-19's Impact In Italy And Europe. Retrieved from:
https://hub.jhu.edu/2020/03/31/covid-19-impact-italy-europe/
Orion Market Research. (2020). Impact of COVID-19 on Italy Economy Market Size, Share,
Industry Analysis and Forecast 2025. Retrieved from:
https://www.openpr.com/news/1986088/impact-of-covid-19-on-italy-economy-market-size-
share-industry
Pisano P.G., Sadun, R. & Zanini, M. (2020). Lessons from Italy’s Response to Coronavirus.
Retrieved from: https://hbr.org/2020/03/lessons-from-italys-response-to-coronavirus
Statista. (2020). Impact of coronavirus (COVID-19) on real gross domestic product (GDP)
growth in Italy in 2020 and 2021. Retrieved from:
https://www.statista.com/statistics/1101135/impact-of-coronavirus-covid-19-on-real-gdp-in-
italy/
WHO. (2020). Coronavirus disease (COVID-19) Pandemic. Retrieved from:
https://www.who.int/emergencies/diseases/novel-coronavirus-2019
WHO. (2020). Coronavirus disease. Retrieved from:
https://www.who.int/health-topics/coronavirus#tab=tab_1
World Economic Forum. (2020). How could Coronavirus impact Italy's economy? . Retrieved
from: https://www.weforum.org/agenda/2020/03/italy-coronavirus-econoic-slow-down-virus-
outbreak

Economics 6