Today Banca d'Italia releases its report on economic developments in the Italian regions.
The post-pandemic recovery involved all Italian regions, with a greater impact in the North and a lesser one in the Centre. Contrary to what occurred after past crises, production and employment grew at a greater rate in the South than the national average. In 2023, activity increased more significantly in the South and Islands due to greater expansion in the construction and service sectors, to a smaller contraction in industry, and to growth in exports. According to Banca d'Italia's quarterly indicator of regional economic activity in Italy (indicatore trimestrale dell'economia regionale, ITER), the increase in GDP in the first half of 2024 was slightly more pronounced in the southern regions, albeit still moderate in all territorial divisions. Firms across the country expect lower investment growth. Over 2023 and the first six months of this year, employment continued to expand at a greater rate in the South. Although declining since the beginning of the year, inflation has eroded household disposable income and slowed household consumption, particularly in the Centre and South. Since the third quarter of last year, the marked decline in credit to the productive sector has led to a contraction in bank loans to the entire non-financial private sector in all parts of the country. This decline was due to both lower demand for loans and to greater risk aversion on the part of intermediaries in a weak macroeconomic context. In 2023, public investment accelerated. It is likely that investment will further strengthen thanks to resources from the 2021-27 programming period of the cohesion funds, still in its start-up phase, and the implementation of other National Recovery and Resilience Plan (NRRP) measures.
