Economic activity in Lazio contracted under the impact of the global economic and financial crisis in 2009. According to Prometeia estimates, GDP fell by 3.5 per cent in real terms in the region, compared with 5 per cent in Italy as a whole. Demand for the industrial products of the region hit a low in the first quarter. Orders gradually recovered in the second half of the year and continued to do so in the first quarter of 2010.
Growth is expected to be weak in 2010.
The capacity utilization rate declined. The upturn in orders was reflected only in part in production levels, since firms ran down their inventories of finished products, which had reached a peak at the end of 2008. In the first quarter of 2010 industrial production grew slightly.
The low capacity utilization rate and persistent uncertainty about the strength of the economic recovery adversely affected the investment cycle. Fixed investment diminished in real terms.
The persistence of the global economic crisis was reflected in a drop in the number of overnight stays by foreign visitors in Rome. The inflow of Italian tourists also decreased. Both the number of passengers and the volume of goods handled by Lazio's airports diminished.
Lazio's exports of goods fell. There was a slight increase in exports of pharmaceuticals, Lazio's leading export sector, but very substantial reductions in those of food products, machinery and equipment, basic metals, textiles and clothing, and transport equipment.
Conditions in the regional labour market deteriorated. The average annual level of employment fell; the contraction was concentrated in manufacturing and services. Recourse to the Wage Supplementation Fund rose sharply and the unemployment rate rose.
Bank lending to customers resident in Lazio continued to slow down in 2009. Lending to households decelerated, while lending to firms contracted overall, although lending to small firms expanded. These patterns were basically confirmed in the first quarter of 2010.
New home mortgage loans to households diminished. About half of the new loans were at variable rates. Consumer credit granted by banks and financial companies expanded more slowly than in 2008.
The ratio of new bad debts to the stock of loans at the beginning of the year rose for both firms and households. The indicators of credit risk increased for manufacturing firms in particular.
The overall growth in bank funding slowed. Households' and firms' liquidity preference helped to sustain the expansion in current accounts, while repos contracted. The component of bank funding through bond issues grew.
The negative balance between subscriptions and redemptions of units of Italian investment fund and shares of SICAVs dwindled to nil in the first half of 2009. In a context of high volatility in the financial markets, the balance became slightly positive in the latter part of the year.
The number of bank branches in Lazio held at about the same level as in 2008. The number of municipalities served by bank branches remained unchanged.
