Covid has overwhelmed the income and consumption of Italians. In the 2020 health emergency, families saw their availability cut quarter after quarter. A vertical decline, with the fourth quarter of 2020 in which the disposable income of Italian consumer households decreased by 1.8% compared to the previous quarter, and the related final consumption by 2.5%. Less purchasing power, more propensity to save: endemic factors, just like the coronavirus, of a scenario of economic uncertainty for the future that has halted consumption. With each Italian family spending an average of 5 thousand euros less.
And to confirm this are also Confesercenti’s elaborations on Istat data for 2020. Between pandemics and restrictions, in 2020 Italian spending fell by 123 billion euros, for a drop of about 5 thousand euros per family: the worst ever in history of the Italian Republic. The item that sees the most significant share of consumption disappearing is that for hotels and restaurants, for which the drop in spending is around 43 billion, almost 120 million less per day. But the “distance economy” triggered by the pandemic weighs on all expenses related to sociality and movement, starting with transport, which recorded the second decrease in terms of size (-33 billion). Spending on recreation and culture (-16.3 billion) and fashion is also down, Confesercenti notes: between teleworking and stopping ceremonies, Italians in 2020 reduced their consumption of clothing and footwear by as much as -13.2 billion. Health expenditure is also down (-2.3 billion), while investments in education are also falling (almost one billion less).
On the other hand, the costs associated with staying at home increase. Starting with food: the unavailability of bars and restaurants, subject to restrictions for almost half of the year, led to an increase in the consumption of food products, in the order of +2.8 billion euros. Smart working also increases spending on communications – voice that includes IT devices, telephone and data network fees, which marks an increase of 625 million – and bills: the bill for expenses incurred for the home, water, electricity and other fuels grows by almost 1.4 billion in 2020.
Driving the general fall in consumption, as mentioned, was the reduction in incomes recorded in the year of the pandemic: those from work, which mark a collapse of over -90 billion between self-employed and dependent work, but also capital incomes are fell by -6.4 billion euros due to the reduction in interest rates. A hole only partially recovered by economic policy with the support provided through social benefits (+37.6 billion).