Last week, the Bank of Italy published a report stating that Lombardy's economy in 2023 did not show the expected growth. This sparked a heated debate: Is Lombardy still the "locomotive" of Italy?
But what does it actually mean to be a locomotive? A locomotive is not just a region where everything grows, but also a place where most innovations and research happen, where new ideas are born. For decades, Lombardy has indeed played this role for all of Italy.
Why was Lombardy the locomotive?
Lombardy produces more than 20% of Italy's GDP—this is a huge figure! In 2023, the region generated 480 billion euros, which is more than the GDP of many European countries, including Greece, Austria, and Romania. If Lombardy were a separate country, its economy would rank 10th in the EU!
It’s no surprise that Lombardy is one of the most dynamic regions in Europe. From 2019 to 2023, its GDP grew by 6.7%, which is significantly more than other countries like France or Germany. More than one-sixth of Italy’s population lives here, and nearly one-fifth of all employed Italians work in Lombardy. Furthermore, 26% of Italy's total exports come from here.
What makes Lombardy special?
Lombardy is not just a financial and industrial hub but also a center of innovation. It hosts the largest research centers, multinational companies, and universities. The region attracts massive investments in research and development—around 5.4 billion euros annually, accounting for a fifth of the country’s national science spending.
At the same time, Lombardy remains one of the most attractive areas for investments, including in real estate. Milan, as one of Europe’s leading financial and business centers, continues to attract international investors despite a slowdown in the market. Major construction projects continue to develop, and the region actively draws capital investments both in residential and commercial properties. The steady demand for housing and high quality of life make Lombardy an appealing choice for those seeking profitable real estate investments.
Why has economic growth slowed?
Despite all this, in the past two years, the region's economy has started growing slower than before. The reasons lie in the overall decline in industry and exports. In 2024, according to the Bank of Italy’s forecast, Lombardy’s economy will grow by 0.5%, aligning with the national growth rate. Problems with exports, particularly to Germany and the United States, are linked to a decline in industrial sales and the crisis in the automotive industry.
What’s next?
Although economic indicators in Lombardy have not been encouraging in the last two years, this doesn’t mean the region’s role as the country’s economic engine is over. Lombardy is still the key driver of growth for all of Italy, and its importance to the national economy has not diminished. Despite temporary challenges, innovation continues to develop in the region, and the average income per capita remains the highest in the country. Investors still see Lombardy as a strategically important and promising market, particularly in real estate and technology.