in 2023 the noon grew by +0,4%, half of which came from the Centre-North (+0,8%) despite the fact that compared to the pre-pandemic the recovery in employment was more accentuated in the southern regions and in the post-Covid period the GDP was increased by 10,7%. But the alarm is above all about the future: by 2080 the South risks losing 8 million residents.
These are the salient data that emerge from 2023 report on the economy and society of the South presented today by Svimez.
In 2023 the GDP of the South increased by 0,4%
According to Svimez's calculations, which confirm Istat's forecasts, in 2023 Italian GDP will grow by 0,7%, a percentage that represents an average between +0,4% in the South and +0,8% in the Centre. North.
Numbers that once again show the growth gap which has characterized the country for decades, attributable at least for this year above all to the decline in household consumption (-0,5%), which should not be observed in the Centre-North (+0,4%). The unfavorable dynamic for the South is caused by one contraction of disposable income of southern families (-2%), double compared to the Centre-North as in 2022. Investments should be affected by a positive dynamic, but with a strong deceleration compared to 2022: +5% from +9,8 in 2021 in the South, +3,3% after +9,1 in 2022 in the Centre-North.
The Pnrr avoids recession in the South
And the next few years? The association expects that the GDP in 2024 grow by 0,7% at national level (+0,7 in the Centre-North and +0,6 in the South) and in 2025 of 1,2% (+1,3 in the Center and North and +0.9% in the South). The territorial dynamics of the 2024-2025 GDP are affected by the expansive effects of the interventions financed by the Pnrr. Svimez estimated the cumulative impact on the national GDP over the two-year period at 2,2 percentage points in the hypothesis of complete and timely use of available resources: +2,5 in the South and +2% in the Centre-North. According to estimates, the Pnrr will avoid recession in the South in both forecast years: –0,6% and –0,7% the GDP of the South in 2024 and 2025 “without Pnrr”. The Centre-North also benefits from the stimulus, thanks to which the area avoids substantial stagnation in the two-year period: –0,2% and flat growth in the Centre-North and South in 2024 and 2025 in the “without Pnrr” scenario.
South: in the post-Covid GDP +10,7% driven by construction, inflation weighs on families and wages
From the future to the recent past. In the two-year period 2021-2022, Southern Italy's GDP grew by 10,7%, more than offsetting the 2020 loss of -8,5%. In this case it is a similar dynamic to that recorded in the Centre-North, where growth in the same period was 11% and the decline in 2020 was -9,1%. Taking the cumulative growth figure of non-agricultural added value over the two-year period to 100, services contributed 71,1 points in the South and 63,6 in the Centre-North, explains Svimez.
But it was above all what pushed growth construction. The contribution of construction went 7 points above the average for the Centre-North (18,9 versus 11,9), thanks to the expansive impact exerted by the 110% Superbonus. Conversely, the contribution ofindustry was limited in the South: 10 points compared to 24,5 in the Centre-North, also by virtue of the significant thinning of the production base suffered between 2007 and 2022: almost -30% of added value, against a decline of 5,2 % in the central-northern regions. However, the European comparison reveals the delay also accumulated by the industry of the Centre-North: in the same years the industrial added value of the EU-27 increased by almost 14%, that of Germany by over 16%.
For inflation, the surge in consumer prices recorded in 2022 hit low-income families more intensely, mainly concentrated in the Southern regions, underlines Svimez, according to whom last year inflation eroded 2,9 points of the disposable income of southern families, more than double the figure for the Centre-North (-1,2 points).
Compared to other European economies, in Italy the inflation dynamic has had a significant impact on real Italian wages, which between the second quarter of 2021 and the second quarter of 2023 suffered a much more pronounced contraction than the EU-27 average (-10,4% versus -5,9%), and even more intense in the South (-10,7% ) due to the more sustained price dynamics. This dynamic is part of a medium-term trend in real gross wages per employee, which is also particularly unfavorable in the South: -12% real wages compared to 2008 (-3% in the Centre-North).
Employment is rising, but precariousness and poverty are returning
In the post-Covid period, the recovery in employment was more accentuated in the southern regions: +188 thousand in the South (+3,1%), +219 thousand in the Centre-North (+1,3%). However, after the rebound in employment, the situation began to worsen again precariousness. Since the second half of 2021, more stable employment has grown, but vulnerability in the southern labor market remains at pathological levels, Svimez argues. Almost four out of ten workers (22,9%) in the South have a temporary job, compared to 14% in the Centre-North.
In this context, in 2022 absolute poverty it has increased throughout the country, reaching unprecedented levels: there are 2,5 million people living in families in absolute poverty in the South: +250.000 more than in 2020 (–170.000 in the Centre-North).
The growth of poverty among the employed confirms that work, if precarious and poorly paid, does not guarantee escape from social hardship. In the South, absolute poverty among families with an employed reference person rose by 1,7 percentage points between 2020 and 2022 (from 7,6 to 9,3%). An increase is observed among families of workers and similar workers: +3,3 percentage points. These increases are even higher than that observed for the total of families in conditions of absolute poverty.
By 2080 the South risks losing 8 million residents
The decline in births and the parallel increase in life expectancy have meant that Italy has become one of the oldest European countries, the report highlights.
Internal and international migrations have expanded the South-North demographic imbalances. If on the one hand, immigrant communities are mainly concentrated in the North, "rejuvenating" an increasingly elderly population; on the other, the South continues to lose population, especially qualified young people.
According to Svimez's calculations, from 2002 to 2021 over 2,5 million people left the South, mainly towards the Centre-North (81%). Net of returns, the South has lost 1,1 million residents, many of them young: in the same period, in fact, the South suffered a net outflow of 808 thousand under 35s, of which 263 thousand graduated.
By 2080, Svimez estimates, a loss of over 8 million residents in the South, equal to just under two thirds of the national decline (–13 million). The population of the South, currently equal to 33,8% of the Italian one, will be reduced to just 25,8% in 2080.
In this context, the progressive aging process of the country will not stop in the coming decades: between 2022 and 2080, the South is expected to lose 51% of the youngest population (0–14 years), equal to 1 million and 276 thousand units, compared to –19,5% in the Center -North (–955 thousand). The working age population will reduce in the South by more than half (–6,6 million), in the Centre-North by around a quarter (–6,3 million units). The South will then become the oldest area in the country in 2080, with an average age of 51,9 years compared to 50,2 in the North and 50,8 in the Centre. To reverse the decades-long trend of declining births, it is necessary to implement active work-life balance policies and strengthen welfare services, the report highlights.
It will be necessary to pay a lot of attention especially to women, strengthening them female employment and services. The southern regions today have the lowest rate of female employment compared to Europe (EU average 72,5): Campania (31%), Puglia (32%) and Sicily (31%).
The report also highlights serious delays in the provision of early childhood services, especially regarding the authorized nursery places for 100 children between 0-2 years in 2020: Campania (6,5), Sicily (8,2), Calabria (9) and Molise (9,3). These are the southern regions furthest from the LEP objective of authorized places to be reached by 2027 (33%). The investments of the Pnrr aim to bridge these disparities, but they were not planned starting from a territorial mapping of investment needs, but rather through tender procedures, with a response capacity strongly influenced by the administrative capabilities of local authorities.
The risks of differentiated autonomy
Svimez dedicates part of his report todifferentiated autonomy which, the association underlines, exposes the entire country to risks of unsustainable fragmentation of public policies called to define a national strategy for growth, social inclusion and strengthening of the business system.
Differentiated autonomy also risks freezing the territorial gaps in per capita spending that are already present and weakening national redistribution policies between individuals and territorial rebalancing. The delegated functions would absorb a large part of the regional Irpef: approximately 90% in the case of Veneto, shares between 70 and 80% for Lombardy and Emilia-Romagna. The effects would be significant in terms of contraction of the national budget, with the consequent reduction of the space for action of central public finance. The Irpef revenue retained by the three regions would be equal to approximately 30% of the national revenue.
