The Bank of Italy has published an economic update estimating that Lazio’s output grew 1.0% in the first half of 2026 compared with the same period a year earlier, slightly outpacing Italy overall. Consumption and public investment supported the expansion, while lending accelerated. However, rising energy costs squeezed purchasing power and business margins. Firms’ expectations point to slower activity in late 2026 and early 2027, with more cautious investment plans amid rising inflation and tighter monetary policy. Public works, particularly projects linked to the National Recovery and Resilience Plan, continued to support construction. Goods exports fell 6.8% in value in the first half, driven by transport equipment and pharmaceuticals, following strong growth in 2025 partly associated with tariff concerns. Inflation averaged 2.9% in the first nine months, driven by transport and housing costs. Household disposable income increased just 0.5% in real terms in the first half, while real consumption rose 1.3%. More than half of surveyed businesses reported that higher energy costs had reduced profit margins. Bank lending to the private nonfinancial sector grew 7.3% annually in June, up from 5.4% in December 2025. Business lending increased 12.3%, driven by larger firms, while loans to small businesses contracted 3.1%. Household borrowing from banks and finance companies rose 2.7%, supported by mortgages and consumer credit. Banks reported slightly easier lending criteria for businesses and broadly unchanged conditions for households. Credit quality improved, with gross nonperforming loans declining to 1.4% of total bank lending from 1.7% in December 2025.

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