inequality ; rather, it aggravates it. italian companies but let me turn to italy. between 2008 and 2013 the italian economy suffered the worst slump of its history : gdp went down by 9 percentage points, slightly more than household spending, while investment fell by 30 points, industrial production by almost 25 and employment by 4. the double - dip recession was far more severe in italy than in the rest of the euro area. since then the italian economy has gradually recovered, mostly thanks to domestic demand, especially consumption and, more recently, capital spending, but also with a significant contribution from exports. potential output has been slowly improving too. three years into the recovery, business investment in italy is now approaching the average of the ten years preceding the global financial crisis. we expect this positive trend to continue over the current and the next two years, partly thanks to the support of external demand. the latest surveys run by the bank of italy on a large sample of companies indicate that the recovery of investment plans is now on a firmer footing, and that the lack of productive capital is being reabsorbed, with the exception of construction spending, which remains extremely low. the common monetary policy designed by the european central bank has provided an important stimulus to every component of aggregate demand. but fiscal incentives have also played a role, while respecting the european rules on public finance. however, we need a longer perspective than a purely cyclical one. the large swings since 2008 followed a decade of very slow growth, when the debate centred on the question of whether italy was in a sort of unstoppable decline. from 1999 to 2007, gdp grew on average by 1. 5 per cent per year, where the positive contributions of population and employment growth were accompanied by a disappointing performance on the part of total factor productivity ( + 0. 1 per year on average ), which instead recorded significant increases in france ( 0. 6 ) and germany ( 0. 9 ). such a prolonged sluggishness of productivity reflects structural factors. the interpretation we proposed at the bank fifteen years ago 1 – nowadays shared by many experts – is that since the mid - nineties italian companies have been hit by a double world revolution : a shift in the dominant technology ( icts ) that triggered a re - organization of production on a global scale, and globalization. the italian economy was harder hit by these shocks because of its structural features : most of its companies are small in size and never grow, a characteristic that goes

financial conditions worldwide. real rates increased at all maturities and share prices fell, amid rising volatility. risk premia on european asset classes have gone up relatively more, owing to the stronger impact of the war in ukraine. tensions emerged in some key currency markets, including the yen and the british pound markets. financial markets remain exposed to a variety of risks. stock and bond markets are volatile, and exposed to changes in investor sentiment ; in this context, the importance of preserving confidence in the government bond market, with a credible long - run strategy for the public finances, is, i think, well understood. private credit risk may also increase because of weakening growth and increasing debt servicing costs. tensions on commodities markets have increased and may remain elevated. high natural gas prices have already started to spill over to substitutes ( coal for instance, and also elements used in the production and storage of renewable energy such as lithium and nickel ), and to energy - intensive commodities. 2 / 4 bis - central bankers'speeches a protractedly deteriorating macroeconomic environment might affect italian firms'vulnerability. on the other hand, in italy stability risks stemming from households appear limited overall, thanks to low indebtedness ; the increase in energy prices, though, is making its impact felt on the most vulnerable ones. bank credit to the italian private sector continued to expand at a robust pace in recent months. the italian banking system is facing the risks linked to the current situation from a stronger position than on the eve of previous crises. banks'asset quality remains good on average, and the new non - performing loan ratio is still low, although the share of stage - 2 ( i. e., riskier ) performing loans has started to increase. banks'capitalisation, while coming slightly down in the first half of the year, is higher than before the pandemic. with all this, banks remain highly exposed to cyclical risks, and should cautiously factor in all uncertainties when making their risk and capital management decisions. insurance the impact of the market turmoil on italian insurers'solvency ratio has remained modest until now. in the market - consistent framework on which prudential standards are based, ( risk - free ) interest - rate increases act on both sides of insurers'balance sheet. the fair value of assets decreases, but so does also the present value of technical provisions, the main liability in their balance sheet. at the end of june, italian insurers'average solve