The Bank of Italy has published an economic update estimating that real output in the autonomous provinces of Trento and Bolzano grew by 0.7% and 1.0%, respectively, in the first half of 2026, compared with 0.9% nationally. Tourism, household consumption and public investment supported the expansion, while declining exports and subdued private investment constrained activity. Credit developments differed between the provinces, although the share of impaired loans declined in both. Tourist overnight stays increased by 4.4% in Trento and 3.7% in Bolzano compared with the first half of 2025, supporting services activity. By contrast, real exports fell by 1.4% in both provinces, and industrial and services firms broadly maintained plans formulated at the end of 2025 to reduce investment. Real household disposable income rose by 0.8% in each province, with higher inflation limiting purchasing power gains. Employment fell by 0.9% in Trento and remained broadly stable in Bolzano. Household lending nevertheless accelerated to annual growth of 3.0% and 2.0%, respectively, in June, driven mainly by housing mortgages. Provisional August figures show business lending down 3.0% from a year earlier in Trento but up 4.1% in Bolzano. Loans to smaller firms continued to contract in both provinces. During the first half, borrowing costs increased for both business liquidity and investment financing. Rates on liquidity financing rose by about 20 basis points to 4.7% in Trento and 4.6% in Bolzano. Gross impaired loans represented 2.1% of total bank lending in Trento and 2.6% in Bolzano in June, down from 2.4% and 2.8%, respectively, at the end of 2025.

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