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Weakening and Uncertainty: Bank of Italy Analyzes Calabria’s Economic Outlook in 2023

In the first half of 2023, the Calabrian economy finds itself in a period of weakening and uncertainty, according to the cyclical analysis conducted by the Bank of Italy. The institution has presented the results, highlighting a loss of vigor in various sectors, reflecting a trend that has been ongoing since last year.

Bank of Italy: The General Picture

The Iter indicator, developed by the Bank of Italy, reveals that economic activity in Calabria grew by 1.1% in the first half, in line with the rest of the country but significantly down from the 3% recorded last year. Director Marcello Malamisura explained that this weakening affects various sectors, with greater intensity in manufacturing, while construction and services maintain less elevated rhythms.

The slowdown in the industry, in particular, has contributed significantly to this loss of vigor. Construction has still benefited, albeit to a lesser extent, from the completion of building redevelopment interventions stimulated by the Superbonus. In the tertiary sector, despite the slowdown in trade and weak growth in tourist arrivals, there has been a positive trend.

Employment Trends

The report emphasizes signs of weakening in employment, concentrated mainly in permanent contracts and the female component. Unemployment has returned to grow, but mainly due to an increase in job search. Employment trends indicate a slowdown after the recovery of previous years.

In the first half of the year, the number of employed persons grew by 0.9% compared to the same period last year, a much more contained increase than in the South and Italy, at 2.4% and 2%, respectively. In the first six months, the employment rate reached 43.5%, an increase of 5 tenths compared to the same period of the previous year, driven also by the continued reduction in the working-age population.

Bank of Italy: National Recovery and Resilience Plan (Pnrr) and Challenges

The implementation status of the Pnrr in Calabria is analyzed in the report. As of October 10, 5.6 billion euros were allocated to public entities, with resources focused on digitization, innovation, culture and tourism, and green and digital revolution. However, the report highlights challenges such as price increases, low business participation in tenders, and administrative obstacles.

Consumption and Inflation

The consumption of Calabrian households is affected by rising prices, showing a marked slowdown in real terms over the course of the year. Inflation, while gradually decreasing, remains at elevated levels. The decrease in families benefiting from the citizenship income is highlighted as an effect of the reform.

Tourism and Foreign Trade

The tourism sector shows a slowdown with an increase in arrivals in the first eight months, but lower than in 2022. Foreign trade sees a strong growth in exports, but the contribution to GDP remains modest.

The growth of tourist flows is mitigated, with a 2% increase in stays in accommodation facilities in the first eight months of the year, according to the Calabria Region’s tourism observatory. Foreign tourists have grown by 18%, while domestic ones have slightly decreased. Overnight stays are still about 20% lower than in 2019. However, the number of passengers transiting through Calabrian airports has increased by 17%, returning to pre-pandemic levels.

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