Tuscany, the economy slows down and is still chasing pre-Covid levels

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The Tuscan economy is still chasing pre-Covid levels, penalized by two sectors with a strong international openness such as the fashion industry and (American) tourism, which caused a sharp fall during the pandemic. For this reason, the recovery that took place in 2022, which was also important and brought +3.8% of GDP, +17.4% of exports and +4.6% of employment, is not enough to calm spirits. This is the summary of the Bank of Italy’s report on the performance of the Tuscan economy, presented today, Friday 22 June 2023, in the Florence office by the regional director Mario Venturi and the head of economic research Silvia Del Prete.

“Tuscan GDP at the end of 2022 was still four percentage points below pre-Covid”, explained the Bank of Italy economists, specifying that pre-Covid levels have been recovered by construction but not yet by services or even by industry. Now we need an extra boost, which however is not seen, on the contrary: starting from the second half of 2022 the economy has slowed down and the sample survey on the 2023 prospects carried out by Bank of Italy interviewing industrial companies with at least 20 employees indicates turnover stationary, declining investments and caution on the part of entrepreneurs.

In the first quarter of the year, business loans recorded -1.9%. Hopefully in services, and in particular in tourism which is making a strong recovery, and in the thrust of the Pnrr which, however, will still be felt very little this year. Instead, what is being felt is inflationary pressure, which has led to the launch of a phase of monetary restriction by the European Central Bank which is spreading knock-on effects. “A new element called inflation has arisen and is significantly reducing growth,” says Bank of Italy.

To get out of the stagnation, according to the Institute, some structural issues in the region need to be resolved, including innovation: «On the product innovation front, Tuscany seems to have recovered ground – explained Del Prete – as evidenced by the acceleration on patents in the period 2001-2018 which led it to be the fifth region in Italy for applications presented; on process innovation measured by young companies (led by shareholders under the age of 35, ed), on the other hand, we are further behind».

Bank of Italy’s analysis for the 2010-2021 period signals the sharp decline in youth businesses in Tuscany, three times that of Italy, linked to the lower birth rate of businesses of this type, especially in the hospitality and catering sector.