MILANO – Strong reduction in the net debt of public administrations, the result of a growth in revenues that was more than double that of expenditure. Increase in disposable income, which however – due to the rise in prices – becomes a substantial stagnation of purchasing power. Slightly increasing propensity to save as well as the investment rate of financial companies. Growth, finally, also due to the tax burden.
This is the picture that emerges from the Istat data on the fourth quarter of 2021, a period that seems light years away with the recent evolution of world events and their impact on the economy: the cavalcade of raw materials, the Russian invasion of Ukraine in Ukraine. February 24 and the subsequent war that accelerated the inflation trend even more, hitting energy and other raw materials (from metals to agriculture) that are important in many supply chains. This is the reason why consumer associations talk about “a world that no longer exists” (Unc) and “obsolete and unfortunately already outdated” data (Codacons).
The household budget
Remaining at the Istat survey, in the last part of the past year (period October-December 2021) “the gross disposable income of consumer households it increased by 1.3% compared to the previous quarter. Against the acceleration in prices observed in the same quarter (+ 1.2% the increase in the implicit deflator of final household consumption), purchasing power increased by 0.1% “.
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The propensity to save of the Italian nucleas was equal to 11.3% (+0.2 percentage points compared to the previous quarter): this is due to the fact that final consumption expenditure was “slightly weaker” than the progression of: +1, 2 against +1.3 per cent. The household investment rate also rose slightly (+0.2 points) to 6.8%, against an increase in gross fixed investments of 4.9%.
As mentioned, the associations’ comments are skeptical: “Data from a world that no longer exists, both due to the outbreak of the war and the stratospheric increases in electricity and gas prices taken from 1 January of this year and which are having devastating effects both on the production costs of companies and on the purchasing power of households, given that inflation in the first quarter of 2022 rose by 3.1% compared to that of the fourth quarter 2021, going from 3% in October to 6.7% in March “, the note released by Massimiliano Dona, president of the National Consumers Union. “Furthermore, even if household consumption increased by 1.2% compared to the third quarter of 2021, these figures are still unsatisfactory because they are still below the pre-crisis values of 2019. In particular, compared to the fourth quarter of 2019 they are still lower. of 0.6%, 1 billion and 626 million “concludes Dona. In line with the findings of the president of Codacons, Carlo Rienzi, for whom the increases in 2022 “will strongly affect the purchasing power of citizens with direct effects on spending” and “will have effects on the country’s economic growth”.
The balance sheet of public administrations and businesses
Commenting on the data, Istat then notes that “in the fourth quarter of the year, the indebtedness of public administrations to GDP fell significantly in terms of trends due to the substantial increase in revenues, which more than offset the increase in expenditure “. Two days after the writing of the Economics and finance document from the government – expected on Thursday in the CDM, will take note of the slowdown in growth -, the Institute explains that total expenditure in the fourth quarter of 2021 increased by 3.1% on 2020 while their incidence on GDP (equal to 59, 8%) decreased in trend terms by 1.3 percentage points. In the same period, total revenues increased in trend terms by 8.1% and their incidence on GDP was 56.8%, up by 1.5 percentage points compared to the corresponding period of 2020. As emerged from the eve of data, overall in 2021 the net debt of public administrations reached -7.2% of GDP, an improvement compared to -9.6% in 2020. In 2021, in terms of incidence on GDP, the primary balance and the current balance were negative, equal to -3.7% (-6.1% in 2020) and -1.6% (-4.5% in 2020), respectively. In the same period, the tax burden stands at 43.5% of GDP, an increase of 0.7 percentage points compared to 42.8% in 2020.
Finally, as regards non-financial companies, their share of profit “fell slightly compared to the previous quarter” – to 41.6%, a decrease of 0.5 percentage points compared to the previous quarter – “while their investment rate recorded growth over the previous quarter, “to 23.1%, an increase of 0.7 percentage points over the previous quarter.