Lazio's economy continues to grow, but 2025 remains uncertain due to geopolitical tensions

From November 2021 to August 2024, public works with a total value of EUR 2.9 billion were tendered under the NRP: the award rate was 74 per cent, which is lower than the Italian figure (80 per cent). The award rates were lower than the national average for all territorial authorities (Region, Provinces and Municipalities) and higher for Other authorities (public universities, park authorities, consortia, utilities, etc.). The state of progress of the building sites showed that works completed or started accounted for 44.7 per cent of the total works in the tenders awarded. This share was also lower than the overall figure for the country (48.7 per cent).

The economic and financial conditions of companies remain favourable on the whole. According to the Bank of Italy survey, the proportion of companies expecting to close the year in profit was 75 per cent. The financial liquidity ratio increased slightly. Bank credit continued to decline, albeit to a lesser extent than at the end of 2023 (-1.7 per cent year-on-year change in June against -2.5 in December). The trend was affected by weak investment demand and a slight tightening of supply criteria. The average rate on loans for investment financing declined to 5.7 per cent, down 0.9 percentage points on the last quarter of 2023; the decrease was linked to expectations of monetary easing, which actually started in June.

Employment increased by 1.0 per cent, slowing from 2.4 in the first half of 2023 and lower than the national change (1.5 per cent). Half of the new employee positions were fixed-term jobs. The employment rate rose slightly (63.7 per cent), remaining 2 percentage points above the Italian rate. The unemployment rate remained stable at 7.2 per cent, while the Italian rate decreased to the same value. The activity rate rose to 68.8 per cent: the labour force increased by 0.8 per cent, while the working age population grew by 0.2 per cent.

The increase in employment supported the growth of nominal household disposable income (3.6 per cent). The inflation rate in the six-month average decreased by more than 6 percentage points compared to the same months in 2023; in June it was 0.9 per cent (in line with the Italian figure). Thus, income in real terms grew by 2.3 per cent (as in Italy). The inflation rate between July and September remained more or less stable. By contrast, consumption in real terms decreased (-0.6 per cent); in Italy it was unchanged. However, consumer confidence did not appear to have worsened: in fact, the indicator (referring to the Central macro area) remained at the levels of the first half of last year and in line with the Italian one; expectations for the future also remained unchanged.

The cautious attitude of households contributed to keeping borrowing almost stable: loans from banks and financial companies in June were up only 0.8 per cent compared to 12 months earlier. In the face of weakness in real estate mortgages, consumer credit continued to grow strongly. In the first six months of the year, new mortgages amounting to EUR 2.3 billion were disbursed, a slight decrease compared to the corresponding period of the previous year; 93 per cent were fixed-rate loans. The average rate on loans for house purchases decreased to 3.7 per cent in the second quarter. The reduction was greater for fixed-rate loans (from 4.4 per cent to 3.6 per cent) than for variable-rate loans (from 5.2 per cent to 4.9 per cent). Consumer credit increased by 6 per cent; especially personal loans and loans for the purchase of motor vehicles grew.

The overall riskiness of loans still appears low. The deterioration rate of bank loans to regional customers stood at 1.3 per cent in the second quarter of this year, slightly up on 2023. For households, the indicator remained substantially stable, while signs of difficulty emerged for businesses; the deterioration was mainly attributable to the manufacturing industry and in particular to the increased difficulties in the automotive sector.

The decline in household and corporate bank deposits observed during 2023 came to a substantial halt in the first half of this year (-0.3 per cent change over the 12 months to June). The component ofcurrent accounts continued to decline (-2.8 per cent), albeit at a less intense pace than at the end of last year, while that of savings deposits, stable in December, resumed growth (7.2 per cent). The increase in the value of securities held with the banking system continued (10.9 per cent); the increase was mainly attributable to higher subscriptions of government securities and bank bonds.