The Bank of Italy has published its annual report on the Lombardy economy, showing that the region continued to expand in 2025, with output estimated to have risen by 0.7 percent, slightly above the national average. Growth was supported by a renewed increase in manufacturing output, continued strength in construction and services, solid tourism and a recovery in the real estate market. Corporate profitability remained high, employment kept rising and unemployment fell, while household income and consumption increased modestly. In early 2026, economic activity was broadly stable, but the short-term outlook deteriorated sharply as geopolitical tensions and energy price increases weighed on confidence and business plans. Inflation in Lombardy averaged 1.3 percent in 2025. Exports increased, though by less than potential external demand, with sales to European Union markets providing the main support and exports to the United States rising only slightly. Construction benefited from projects financed by the National Recovery and Resilience Plan and by investment linked to the Milan Cortina 2026 Winter Olympics, while tourism supported accommodation and restaurant activity. Firms largely financed investment from internal resources, liquidity remained high and bank credit to stronger and larger companies increased, with credit risk indicators staying contained. Household debt rose in both consumer credit and housing loans, and territorial public investment increased again, driven mainly by PNRR implementation, including regional health projects and municipal school upgrading. The report also points to a weaker 2026 business environment. Bank of Italy survey respondents expect lower demand and reduced investment, and two-thirds of firms see geopolitical risk as relevant to strategic decisions for 2026-27. Over the medium term, the report highlights innovation capacity as a key factor for Lombardy, noting strong digital investment, rising use of artificial intelligence and a patent intensity above the Italian average, but also a need to broaden adoption of advanced technologies and skilled labour demand.
Bank of Italy2026-06-17
Bank of Italy reports Lombardy economy grew 0.7 percent in 2025 as 2026 outlook weakens
The Bank of Italy’s annual report says Lombardy’s economy grew by 0.7 percent in 2025, supported by manufacturing, construction, services and tourism. Early 2026 activity was broadly stable, but the outlook weakened as geopolitical tensions and higher energy prices hit confidence. Firms now expect softer demand and lower investment.