Economic developments in AbruzzoAnnual report

The period of moderate expansion in Abruzzo that had begun in 2005 continued throughout the year. SVIMEZ estimates that regional GDP will grow by 1.6 per cent, compared with 1.9 per cent for the country as a whole. The recent expansion follows five years of weakness of the economy. According to national accounts estimates, recently revised by ISTAT, the region's GDP declined by almost 2 percentage points overall between 2000 and 2005. There was a larger decrease in per capita GDP (equal to about 5 percentage points) owing to the growth in population.

In manufacturing, the upturn in demand, particularly in the first half of 2006, helped to drive the growth in turnover from both domestic and foreign sales. Export sales accelerated, again benefiting from the strong performance of transport equipment, while the contribution of Italy's traditional export sectors continued to decline. In the construction industry, the residential building sector expanded further but public works contracted. House prices showed some signs of slowing. In the service sector, tourism picked up but retail sales stagnated, particularly among small outlets. There was an increase in the volume of freight transiting via the region's rail and air terminals. Agricultural output was adversely affected by bad weather.

Employment grew by 1.3 per cent, driven by the service sector and to a smaller extent by the construction industry. The unemployment rate fell by 1 percentage point, moving in line with the national rate.

Bank credit expanded, both in the short and the medium and long-term segment. This was partly due to the increased borrowing requirements of non-financial sectors in response to an upturn in investment in fixed and floating capital. Unused margins on credit lines granted to firms decreased, but were nonetheless substantial overall. Lending to households grew steadily, although at a slower pace than in 2005. The ratio of households' debt to disposable income was in line with the national average.

The increase in the ratio of new bad debts to the stock of loans at the beginning of the year was due to increases in both the industrial and service sectors. The bad debt ratio declined, partly thanks to transfers of claims. Bank fund-raising continued to expand. As the spread between market yields and interest rates on bank accounts widened, households began to invest a larger part of their financial assets in government securities and bank bonds.

The number of banks and bank branches operating in the region increased in 2006. At present about two-thirds of residents can choose between at least three banks; in 1990 only half of the region's residents could do so.