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Italy rises to 13th place in global FDI attractiveness rankings

by Micaela Cappellini

Italy has risen to 13th from 16th place in global attractiveness rankings for foreign direct investment, based on an index compiled by consultancy firm A.T. Kearney.

Only Sweden has made a bigger jump than Italy, moving up to 15th place from 22nd.
Despite the sluggish growth affecting Italy’s gross domestic product (GDP), in the Top 25 for 2017, the country has achieved an unexpected result: it has overtaken Brazil and the Netherlands in the rankings and is just behind Switzerland, a champion of stability. It is perfectly placed in the middle of the rankings.

After the political earthquake generated by the referendum in December, which led to the resignation of Prime Minister Matteo Renzi and the creation of a new government led by Paolo Gentiloni, and right when the eyes of the European Commission are focused on the country’s Economic and Financial Document (DEF) and budget measures, it seems hard to believe that Italy could be regaining appeal in the eyes of foreign investors.

How is this possible?

Marco Andreassi, head of A.T. Kearney’s Italian office, explains that “what is reaching foreign investors from Italy today, aside from internal political events, is a message of the solidity of the country. Above all, positive judgment on some big reforms put in place by the previous government, principally the Jobs Act, does not seem to be lacking.”

“In the imagination of investors, Italy is still a country that has hit the accelerator on government missions abroad and on their willingness to sign deals for economic collaboration and commercial openness,” he said.

Regarding Italian sectors that have the most appeal for foreign capital, A.T. Kearney recorded a recovery in interest in the services sector that could transform into a trend also in coming years.

“The year 2016 was not a year of maxi-deals in Italy, but those that stood out were the acquisition of Grandi Stazioni, that of Inter (which Milan has just added to), the Mediaset case along with a substantial group of medium and small operations, around €40-50 million, which concerned real estate assets such as hotels or shopping centers,” said Andreassi.

And the famous capital fleeing Brexit? Based on A.T. Kearney’s 2017 index, Germany is going to benefit the most, which for the first time since the start of the series in 1998 is ranked the second most attractive country for foreign investment in the world (the United States confirms its leadership). If you exclude Norway and Denmark, which have fallen out of the Top 25, and Belgium, which slipped three positions, all the European countries gained appeal in the 2017 rankings.