(Finance) – In the period following the pandemic the Italian economy recorded average growth rates higher than the main economies
of the euro area. The Bank of Italy notes this in its new Report on regional economies, underlining that on the basis of the territorial accounts, not yet updated with the recent revision of the national economic accounts, the post-pandemic recovery involved all territories, to a greater extent the regions of the North and to a lesser extent those of the Centre.
In contrast to what happened in past crises, in the South the product and employment they grew more than the national average. This is – underlines Bank of Italy – an element “of important innovation, even if it could partly reflect factors of a temporary nature, given the particular relevance for the southern economy of the extensive public interventions adopted in response to global shocks”.
As further evidence of the good phase experienced by the South, it is noted that in the first half of 2024 the expansion of employment in Italy continued with different intensity between the territories: particularly pronounced in the South, it was almost zero in the North East, where the slowdown in labor demand is also confirmed by the greater use of wage supplement tools. In 2023, we read, employment growth continued in all areas and was more intense in the South. The number of employed people has increased in this area more than in the rest of the country, even when compared with pre-Covid levels.
To promote the structural reduction of the development gap in the South “it is necessary to give continuity to the ongoing recovery through policies that leverage investments and the quality of institutions and public actionwith the aim of increasing the productive capacity of the southern economy”.
In 2023, household disposable income increasedat current prices, in all macro-areas, especially in the South and the North West, supported by the expansion of employment. The share of households in absolute poverty has remained substantially unchanged on average for the country, but it has decreased in the South; the differential with the Center and North has thus been reduced. This was reported by the Bank of Italy in the chapter dedicated to families of the report on regional economies. Inflation, although lower than in 2022, continued to erode the purchasing power of family incomes, we read, slowing down the growth of consumption. Bank of Italy estimates that the increase in disposable income at current prices continued in the first half of the current year. Despite the more limited increases in prices, consumption remained stable in all areas. Overall household net wealth rose in 2023, mainly due to the expansion of financial assets, particularly time deposits and bonds. Last year, real estate sales decreased everywhere, but to a lesser extent in the South. The purchase of homes without resorting to debt was more frequent, the study says, contributing to a decline in the flow of new mortgages in all areas. Consumer credit, however, continued to increase at a sustained rate. In the first half of 2024, interest rates on loans for home purchases began to fall, reflecting the easing of monetary policy; new mortgage disbursements for the house however remained contained. Finally, Bankitalia reports that the expansion of consumer credit continued
It should also be noted that in 2023 the accounts of local administrations have improved. Investment spending has accelerated, supported in particular by the use in Southern Italy of European cohesion funds from the 2014-20 programming cycle, which is nearing completion, and by the progressive implementation of projects connected with the PNRR; the strong expansion phase also continued in the first nine months of 2024. Looking ahead, it is likely to expect a further strengthening of investments, due to the use of the 2021-27 cycle funds, still in the start-up phase, and the implementation of other measures of the PNRR.
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