Lazio’s economy expanded in the first half of 2026 despite ongoing international tensions and higher energy prices, according to the Bank of Italy’s quarterly regional economic indicator. Output rose 1% from a year earlier, slightly above the national average. Public works and consumer spending supported activity, while foreign demand contracted.

Industrial activity remained positive overall, particularly among larger businesses, although exports fell 6.8% in value. By comparison, exports increased 4.5% across Italy. The decline in Lazio reflected weaker foreign demand in aerospace and pharmaceuticals, where exports dropped 6.5%. Pharmaceutical exports had risen sharply the previous year amid expectations of higher US tariffs.

Construction also grew as public projects continued, including work linked to Italy’s National Recovery and Resilience Plan and remaining Jubilee-related projects. Hours worked in the sector increased 1%, while they declined nationally. In the first half of the year, territorial authorities’ spending on public works investment was about a quarter higher than in the same period of 2025, driven mainly by municipalities, particularly Rome’s city government.

Services expanded as well, with two-thirds of surveyed businesses reporting higher sales. Tourism, however, cooled after the boost from the Catholic Church’s 2025 Jubilee events. Stays in the metropolitan area of Rome fell 4%, as overnight stays at non-hotel accommodation declined despite growth at hotels, especially higher-category properties. Spending by foreign tourists also slipped by about 3%, returning to levels seen in previous years.

Business conditions remained broadly favourable: more than 90% of companies expected to finish 2026 with a profit or break even, a higher share than a year earlier. Rising energy costs weighed on profitability, however. More than two-thirds of surveyed firms said the cost of goods and services had risen or would do so by year-end, and just over half reported narrower profit margins. Financial liquidity remained historically high and edged up from the end of 2025.

Sources: Il Sole 24 Ore Italia.