The Bank of Italy published its annual regional report “The Economy of Basilicata”, presented in Potenza, showing that the region’s economy stagnated in 2024, with activity down 0.2% in real terms according to its Quarterly Indicator of the Regional Economy (ITER). The report attributes the underperformance versus Southern Italy and Italy overall to weaker industrial activity, especially a contraction in the second half of the year. Industrial trends were hit by a sharp drop in output at the Melfi automotive district, weighing on regional exports. In extractives, oil production rose while natural gas output fell, and the value of production edged down mainly due to lower gas prices. Business investment remained weak despite a slight decline in borrowing costs, with widespread use of Transition 4.0 tax credits and much more limited uptake of Transition 5.0; advanced technologies such as robotics and artificial intelligence were described as still uncommon among regional industrial firms. Construction activity slowed markedly as use of energy-efficiency tax incentives declined, while public works continued to benefit from National Recovery and Resilience Plan (PNRR) spending. Services grew modestly on slightly higher tourism demand, and agriculture was negatively affected by a sharp fall in rainfall. Employment growth decelerated, with a pronounced slowdown in industry, while labour supply increased modestly despite a shrinking working-age population; participation remained lower for women and young people and higher for graduates, who the report notes may be more exposed to AI-related risks and opportunities in some service sectors. Household nominal income continued to rise, supporting a partial recovery in purchasing power as inflation fell, but consumption increased only slightly. Lending to households strengthened on higher demand for consumer credit and residential mortgages, supported by lower rates on new loans, while credit to the productive sector continued to decline amid weak demand. The regional banking branch network continued to shrink alongside greater use of digital channels, loan quality showed some deterioration linked to firms, deposits grew for households and businesses, and securities held in custody increased. In decentralised public finance, current and capital spending rose, with PNRR-funded public works progressing, and the report notes that PNRR resources per capita assigned to public implementing bodies in Basilicata are well above the Italian average, while started or completed PNRR works account for just over half of those awarded.
Bank of Italy 2025-06-10
Bank of Italy annual report finds Basilicata economy contracted 0.2% in 2024 as industry weakened
The Bank of Italy's annual report on Basilicata reveals economic stagnation in 2024, with a 0.2% decline in real terms due to weaker industrial activity and a contraction in the Melfi automotive district. Despite increased oil production, the extractive sector's value declined due to lower gas prices, while business investment remained weak and construction activity slowed. Employment growth decelerated, household income rose, and lending to households strengthened, but credit to the productive sector declined amid weak demand.