Southern Italy's economy shows timid signs of recovery after 7 years: report

Southern Italy has showed signs of economic recovery in 2015 and for the first time in seven years, a report estimated Tuesday.

The Italian gross domestic product (GDP) would in fact grow by 0.8 percent overall this year, as a result of 1 percent growth in Northern and Central Italy, and 0.1 percent growth in the South, according to the Association for Industrial Development of Southern Italy (Svimez).

"If confirmed, this forecast is a relevant development," Svimez said.

"However timid, it would in fact be the first positive trend (in Southern Italy's GDP) after a seven year decline".

The Svimez annual report on Southern Italy's economy considered the performance of six regions located south of Rome plus the major islands of Sicily and Sardinia, which all together comprise what is also known as the "Mezzogiorno".

Economic figures up to September 2015 were considered for the analysis, the report stated.

A major boost to the Mezzogiorno's growth would come from private consumption, which is expected to grow by 0.1 percent by the end of the year, according to the researchers.

The employment rate in the area would also increase by 0.6 percent, thanks especially to fiscal incentives that were offered to those firms hiring new workers with open-ended contracts.

The recovery would strengthen in 2016, with the overall GDP and private consumption in the south growing by 0.7 percent and 0.8 percent, respectively, Svimez estimated.

Gross fixed investments, or the total business spending on fixed assets such as factories, equipment, dwelling, and machineries, will decrease for the eighth year in a row by 1 percent in 2015.

However, they return to grow by 0.5 percent next year.

Albeit modest, such positive signals might provide a crucial uplift to the dilapidated economy of Italian southern regions.

Indeed, their overall GDP fell by 13 percent from 2008 to 2014, and the gap in terms of per capita GDP with Northern and Central Italy reached a record 53.7 percent.

Last year, the GDP in the south declined for the seventh year in a row by 1.3 percent.

The Mezzogiorno has always lagged behind the more developed northern and central Italian regions.

Yet, the level of industrial decline, unemployment and impoverishment has worsened so sharply during the economic crisis that it was feared it might become "permanent," Svimez warned in the preview of its report in July.

Even if confirmed, however, the recent and more positive forecast would not allow the southern regions to fill the gap, the report stressed.

A wide divide would persist in terms of GDP, private consumption, and gross fixed investment, and the distribution of per capita annual income would prove that most clearly.

One in two, or 50.4 percent of the population, would in fact belong to the richest two-fifths of society in Northern and Central Italy against only one in five, or 20.5 percent, in the South. Endit