The Bank of Italy’s economic update estimates that Umbria’s gross domestic product grew 0.8% from a year earlier in the first half of 2026, compared with 0.9% nationally. Construction and services supported the expansion, while industrial activity remained weak as geopolitical tensions raised costs and uncertainty restrained investment. Business lending returned to growth after more than three years of contraction, although credit to small firms continued to decline.
Local government investment increased 9.1% in the first half, supporting construction as the impetus from tax incentives faded. Tourist overnight stays rose 7.1%, helping services activity. Employment increased 2.9%, compared with 0.6% nationally, while unemployment remained at 5.0% as labor force participation increased. Household disposable income rose 3.2% in nominal terms, but higher inflation slowed the recovery in purchasing power. Consumer price inflation reached 4.2% in September, with transport, housing and utility costs accounting for more than half of the increase. Real household consumption grew 1.2% in the first half.
Bank lending to the private nonfinancial sector increased 3.3% from a year earlier in June. Business lending rose 4.2%, driven by 6.4% growth among medium and large firms, while lending to small businesses fell 5.2%. Stronger corporate demand mainly reflected working capital needs, alongside slightly less restrictive credit supply conditions. Household borrowing from banks and finance companies grew 2.9%, with new mortgage disbursements increasing slightly. The loan deterioration rate declined to 1.4% in June from 1.7% in December 2025, mainly reflecting improved business credit quality. Banks’ survey responses indicated expectations of markedly weaker financing demand and slightly tighter lending conditions in the second half of 2026.