Lombardy grew more than Italy in 2023

(Il Sole 24 Ore Radiocor) - In 2023 the Lombardy economy, although slowing down compared to the post-pandemic rebound, grew more than the national economy. According to the Bank of Italy's annual report on Lombardy's economy, Lombardy's GDP grew by 1.2% in 2023, compared to Italy's 0.9%, bearing in mind that Lombardy's added value accounts for about 23% of the national value. During the same period, the regional consumer price index dropped to 1% in March from 11% at the end of 2022, thanks mainly to the drop in energy costs. Also according to the report, industrial production stagnated in 2023 (0.2%) and business turnover declined. Investment measured at constant prices, however, increased by 4.4 % compared to 2022.

Despite the difficulties associated with the international context and the European Central Bank's rate hike, however, the report shows that companies in Lombardy were able to cope with the situation, starting from a more solid economic and financial situation than in similar cyclical phases in the recent past. In particular, profits remained high: around 85% of companies in industry and services and 90% of those in construction closed the year with a profit. At the same time, as noted by Bankitalia's experts, companies in Lombardy reduced their indebtedness to banks and disinvested part of the liquid assets accumulated during the pandemic, with the large groups continuing to raise funds through debt securities. Issues with a maturity of more than one year reached EUR 10 billion, of which around EUR 1 billion were of the Esg type. The strength of the balance sheets was positively reflected in the indicators of debt solvency towards intermediaries.

In light of the complex global geopolitical situation, there was a drop in international trade, which was reflected in a reduction of exports valued at constant prices (-0.6%). However, taking into account the trend in demand from the region's outlet markets, Lombardy consolidated its market share. Moreover, in 2023, the difficulties in the supply of raw materials and intermediate products that had characterised the previous two-year period were reduced. As far as the construction sector is concerned, activity continued to expand, still supported by incentives for energy efficiency measures and works financed by the NRP. And precisely in relation to the latter, in Lombardy during 2023 the investments of the territorial authorities of the Lombardy Region increased, supported by the gradual implementation of the interventions financed by the plan. By the end of 2023, more than 13 billion euro had been assigned to public implementers for projects to be implemented in the territory. The estimated amount of the tenders called for was about EUR 6 billion, three-quarters of which had already been awarded.

Looking at other sectors of the economy, in 2023 - also due to the high level of interest rates - there was a setback in the real estate market: residential sales fell by 8.9% year-on-year, with prices in the same segment slowing down to 2.7%, compared to 5.4 in 2022. In the non-financial private services sectors, turnover continued to grow, most strongly in the accommodation and restaurant business, which benefited from the good performance of tourism, especially from abroad.

Finally, as far as the outlook is concerned, according to Bankitalia, the economic trend remained weak in the first months of 2024 and the forecasts available at regional level indicate a new slowdown in the current year. For the Italian economy, the central scenario of the Bank of Italy's forecasts, published last April, predicts growth of 0.6% in 2024 and 1.0% in 2025. In the medium term, the region's development path will be traced by its ability to continue and accelerate the structural changes undertaken in the last decade and to address the problems of the three major transitions: climate, technology and demographics.