The Bank of Italy presented its annual report on the economy of Lombardy for 2024, estimating regional output grew by 0.7% and showing that expansion in services and construction offset a contraction in manufacturing. Inflation slowed sharply over 2024, while core indicators suggested a slight improvement at the start of 2025. Growth estimates for 2024 ranged from 0.5% to 0.8%, with the Bank of Italy’s 0.7% estimate in line with the national average. Consumer price inflation averaged 0.8% in 2024 versus 5.5% in 2023, then rose to 1.8% in March 2025 due to higher energy prices. Manufacturing output fell as weak domestic and external demand and, more recently, uncertainty linked to United States trade policies weighed on investment decisions and reduced capital spending, with firms expecting only modest growth in 2025. Construction activity continued to expand, supported by works financed under Italy’s National Recovery and Resilience Plan (PNRR) and projects linked to the 2026 Winter Olympics, while services turnover increased, particularly in business services connected to digitalisation, and tourism supported accommodation and food services. The report also notes a recovery in property market activity, with transactions rising on lower interest rates and residential prices continuing to increase. Over a longer horizon, the report highlights digitalisation, environmental sustainability and artificial intelligence (AI) as key drivers of structural change. AI use remained limited in 2024, with 8.2% of firms with more than 10 employees using at least one AI technology versus 13.5% in the European Union, although a Bank of Italy survey indicates more than half of firms in industry and services plan to use AI by 2027; the Bank estimates 54% of workers in Lombardy are in occupations highly exposed to AI’s effects. The analysis also points to shifts in the business base away from manufacturing towards knowledge-intensive services, an increase in mergers and acquisitions over 2015–24 involving 2,200 Lombardy firms for an estimated value of about EUR 250bn, and the growing role of risk capital, with venture capital investment in the last three years reaching around 0.1% of regional GDP.

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