home  › Business and economy

The twenty years that southern Italy lost: it will take until 2028 to return to pre-crisis levels

by Carmine Fotina

The latest report by the Svimez think tank points to 20 years of lost growth for southern Italy. The recovery of 2015-2016, confirmed in the forecasts for 2017 and 2018, is like a caress after a punch. With the current economic trends, the regions of the Center-South will recover their pre-crisis levels only in 2028, that is 10 years after the rest of the country. As if 20 years were lost bringing gross domestic product (GDP) back to its 2008 levels.
“Technically the South has come out of recession,” explained the president of the non-profit think tank Adriano Giannola. “But we have to question ourselves on the speed, so that we do not fall back into stagnation”. Svimez is an association that aims to promote the industrialization and economic development of southern Italy.

The push from internal demand
The Svimez report for 2017 confirmed that 2016 was another positive year after the trend inversion in 2015. The southern Italian economy grew 1% in 2016 compared to 0.8% growth in the Center-North and +0.9% at the national level. Forecasts point to further growth, but back below the levels of other macro-areas: this year the South should see a 1.1% rise compared to a 1.4% gain in the Center-North (+1.3% for the whole of Italy) and in 2018 these figures should be respectively +0.9% and +1.2% (+1.1% in Italy). Domestic demand is the main driving factor, with total consumption up 1.2% (+1.4% among families) and investments up 2%. This last figure is lower however compared to 2016, when it reached +2.9% thanks to the determining contribution of industry in the strict sense (+5.2%) and construction (+8.7%).

The region of Campania is on its own a protagonist of a large part of the growth. Campania GDP rose 2.4% in 2016, Basilicata grew 2.1% and Molise was up 1.6% while all the other southern Italian regions, above all due to the effect of the negative agriculture year, remained at the “zero point something” level.

More job posts
The number of employed people is growing. This is the departure point of the Svimez analysis on the social question of the South, but problems also emerge on the quality of employment, salaries, and therefore income. On average in 2016 the number of employed people rose in the southern regions by 101,000 (+1.7%) but remains in any case about 380,000 below the 2008 level.

Tourism and agriculture played a decisive role in 2015, and last year industry also contributed positively. The increase in the number of permanent employees in relative terms is bigger compared to the Center-North, thanks to the extension of a scheme which reduces the amount of social security contributions that employers have to to pay. And also the first months of 2017 are heading in this direction.

Svimez highlighted however that the market has been characterized by an explosion of part-time work, above all that which can be defined as “involuntary” – people accepting part time work due to the lack of full time work. In 2016, full time workers (4.9 million) increased by 1% compared to 2015, while part-time workers rose 4.9%: 1.1 million, of which 858,000 are “involuntary”. The result is that despite the increase in employed people, levels of poverty and social exclusion are still high: 34% of southern Italians are at risk of poverty and 10% face absolute poverty.