ROME, Sept 19 (Askume) – Bank of Italy Governor Fabio Panetta said on Thursday that Italy’s underdeveloped south, which has been a drag on the national economy for years, is finally showing signs of closing the gap with its prosperous north.
Speaking in the Sicilian city of Catania, Panetta said that in recent decades, the southern region’s GDP per capita was a little more than half that of the rest of the country.
However, the so-called “Mezzogiorno” economy has recovered faster than the national average since the COVID-19 pandemic, with strong job growth.
Panetta said that between 2019 and 2023 GDP in the South is expected to grow 3.7%, while the North-Central region is expected to grow 3.3%, exports are expected to grow 13%, while the North-Central region is expected to grow 9%, and employment growth is expected to be 3.5%, faster than the North-Central region.
“According to our latest indicators, the southern economy continued to expand in the first six months of the year,” the central bank chief said.
Panetta cautioned that recent trends are partly due to temporary factors related to post-Covid economic stimulus and welfare measures, which have been more concentrated in the South, but structural factors also appear to be playing a role.
He cited evidence of “a process of production restructuring and consolidation… which led to the exit of weaker, less efficient and smaller firms”.
To build on these encouraging signs, Panetta said, the South needs to boost productive capacity “not through welfare policies, but through investment and reform.”
In particular, the south urgently needs investment to upgrade road, rail and port infrastructure and to address long-term water problems.
Panetta said southern Italy could benefit from recent geopolitical crises, which have caused companies to be more selective about where to produce.
“Our southern region guarantees geopolitical and economic stability, thanks in part to Italy’s accession to the European Union and the eurozone,” he added.
Furthermore, the Mezzogiorno is ideally located at the “Crossroads of the Mediterranean”, where a fifth of the world’s maritime traffic passes.
