The Bank of Italy’s economic update for Friuli Venezia Giulia estimates that regional gross domestic product grew 0.9% year over year in the first half of 2026, matching the national rate. Public investment and tourism supported activity, while rising energy costs limited gains in household purchasing power and contributed to caution over investment. Business credit demand remained weak, contrasting with continued growth in household borrowing. Exports fell 9.6% in value, reflecting a sharp decline in shipbuilding exports. Excluding that sector, exports increased 2.2%, largely because of higher prices. Business investment remained broadly unchanged, and plans for 2027 were cautious, particularly among smaller firms facing energy cost pressures and international uncertainty. Construction continued to benefit from public works. Payments under Italy’s National Recovery and Resilience Plan reached 70% of the funds allocated to the region by June. Employment increased 2.8% in the first half, but real household disposable income rose only 0.4% and consumption grew 0.9%. Inflation subsequently reached 4.2% in September, driven mainly by transport, housing and utility costs. Business bank loans declined 4.3% year over year in June, predominantly because of shipbuilding. Excluding that sector, lending rose 0.9%, although loans to small businesses contracted 3.9%. Profitability, ample liquidity and limited investment restrained borrowing demand, while banks’ lending criteria remained largely unchanged. Household loans from banks and finance companies increased 3.3%, supported by mortgages and consumer credit, despite a marked slowdown in new mortgage growth. Credit deterioration rates declined to 1.1% for businesses and 0.4% for households, averaged over the four quarters ending in June.

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