Istat, the purchasing power of families is growing and the tax burden is falling in the first months of 2023
The purchasing power of Italian families increased by 3.1% in the first quarter of 2023 compared to the last two months of 2022. The tax burden, on the other hand, was 0.9% lower than a year earlier. That shows a new poll by Istat.
In the first three months of 2023 there was a slight income increase for Italian families. Istat reports a 3.2% increase in income and at the same time a 0.6% increase in consumer spending. Given that the price trend was quite stable during this period from January to March 2023 purchasing power of households grew by 3.1%. According to Istat, this is mainly due to “the significant slowdown in price dynamics”. In fact, inflation started to fall in the first few months of the year and then continued throughout the remainder of 2023 so far.
At the same time, the tendency to savings. This means that as income increases slightly, households tend to save more for the future. The corresponding trend was 7.6%, an increase of 2.3% over the previous three months. This tends to be positive as the propensity to save also indicates there is enough money to do so. “The propensity to save among private households continued to decline, but from an economic point of view it marked the first increase after several quarters of decline,” emphasized the Italian statistical office.
Another fact that Istat highlights is that they are negligible for private and public (non-financial) companies Profits fellFor the first time in two years. The share fell to 43.7%, down 0.9% compared to the October-December 2022 period. The same companies also invested less: the investment ratio fell by 0.3% to 24%.
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Finally, the last point concerns public administrations. They took out more loans than last year: the deficit, i.e. the ratio between the amount spent and the amount received, was -12.1% compared to -11.3% in 2022. The reason for this was also the tax burden has fallen: was 37%, down 0.9%. Due to the lower tax collection, the administrations had less income and thus a higher total debt.
However, it should be noted that the first three months of the year do not provide any indication of the tax burden for the year as a whole. For example, in 2022 the tax burden was 37.9% in the first quarter, but over the course of the year it increased and reached 43.5% in the last quarter, i.e. in the period October-December 2022.
