The inflationary trend in the main metropolitan cities has undergone a reversal: in the space of a year it has gone from almost 10% to negative rates, indicating deflation.
The previous year closed with a modest +0.6%: during 2023, consumer prices showed an average growth of 5.7%, in stark contrast to the +8.1% recorded in 2022, the year which ended in December with an increase of +11.6%. As for 2023, Perugia marked the highest increase in prices, with a +1.7% trend, followed by Naples with an increase of +1.3%. On the contrary, deflation was observed in Bari and Palermo, with a decrease in prices of -0.6% and -0.5% respectively.
City data
What is most striking are the evident disparities in comparisons between January and December. Let’s take Palermo for example: in January, inflation increased by 11.7%, in line with the national average, but in December it collapsed to -0.5%. And similar patterns are found throughout the country, albeit with slightly more contained variations: Milan went from +10.5% to +1%, Rome from +8.7% to +0.9%, Turin from +10, 3% to +0.7%, Naples from +9.4% to +1.3%, Florence from +9.7% to +0.4%, and so on. At the end of the year, cities such as Ancona, Catanzaro and Potenza also entered negative territory.
Among the capitals of the regions and autonomous provinces, as well as among the municipalities that are not regional capitals with more than 150,000 inhabitants, the highest inflation was recorded in Trieste (+1.7%), Bolzano and Perugia (+1. 6% both), while the smallest one was recorded in Catania (-0.9%) and Campobasso (-1.2%).
According to data provided by the National Institute of Statistics (Istat), inflation was positioned above the national figure in the five geographical areas. In the Centre, it remained stable at +0.8%, while in the North-East it increased from +0.7% to +0.8%, and in the North West it decreased from +0.8% to +0.7 %. On the contrary, in the South it fell from +0.6% to +0.3%, and in the Islands it remained negative, widening the decline from -0.2% to -0.6%.
In January 2024, a slight increase was observed at the national level, and among the main cities, the highest inflation was recorded in Naples, with a rate of 1.9%, more than double the national average (0. 8%). However, four cities still recorded negative variations: Reggio Emilia (-0.4%), Campobasso (-0.7%), Ancona (-0.3%) and Modena (-0.2%).
Because inflation is falling
What happened reflects a series of differences between cities, with several factors at play, ranging from distribution infrastructure to variations in tourist presence. However, price dynamics show common patterns. The return from inflation was driven above all by the performance of household utilities, such as bills, and food prices.
However, the effects of these variations were not evenly distributed. As economist Fedele De Novellis, partner of Ref-Ricerche, points out, these products have a greater impact on the weakest segments of the population, an aspect that has been constant throughout the period of price increases. Consequently, the increase in prices has hit the cities with a greater presence of more economically vulnerable groups the most, particularly in the South.
This has led to a decline in consumption, especially regarding basic products, which are mainly industrial products. However, this has also had an impact on the North, where the production of such goods is more concentrated, leading to a reduction in industrial production.
With the expected downward stabilization of energy and food prices approaching, it is expected that even the most vulnerable families will be able to recover purchasing power, also thanks to an increase in wages. However, this trend will be differentiated territorially. As underlined by De Novellis, the recovery of wages occurs in an uneven manner: the increases were greater in the industrial sectors, such as chemistry and metalworking, mainly present in the North, while in the South, where the service and agricultural sectors predominate, the wages are struggling to recover. Therefore, a drop in prices under these circumstances is not enough.
Some cities are taking action to inform citizens about the costs of living and, possibly, promote responsible behavior. For a year and a half, Verona has set up 18 totems in the municipal area and on social channels, where food products with price increases and those with decreases are reported.
But inflation continues to undermine Italians’ incomes
Despite the decline in cities, inflation has undermined the recovery of Italians’ incomes, bringing them below pre-pandemic levels, with a total loss of over 6 billion euros compared to 2019. Between 2019 and 2023, in nominal terms, the average income of Italian families rose from just over 38,300 euros to over 43,800 euros per year, an increase of over 5,500 euros. However, this increase is purely virtual, since it was canceled out by the increase in prices: net of inflation, in 2023 the average real income per family is still 254 euros (-0.7%) lower than in 2019. This The situation was illustrated by a re-elaboration conducted by Cer and the Confesercenti Economic Office on family income and employment, based on Istat data.
The decline in average income observed at the national level reflects different geographic trends. Seven regions present a positive balance, especially in Northern Italy, with Valle d’Aosta (+2,951 euros), Lombardy (+1,930 euros), the autonomous provinces of Trento (+1,639 euros) and Bolzano (+2,237 euros), Veneto (+241 euros) and Friuli-Venezia Giulia (+483 euros).
Among the regions that have exceeded inflation, there are also Umbria (+1,391 euros compared to 2019) and, in the South, Puglia (+150 euros) and Basilicata, which records an increase in the average real income of 2,907 euro in five years, second only to Valle d’Aosta in terms of increase.
However, most of Italy remains behind: in all other regions, the comparison between the real average income of 2023 and that of 2019 is negative. The variations range from -69 euros per year in Molise to -4,000 euros in Sardinian families, who suffer the most significant collapse. Calabria remains at the bottom of the ranking, with an average real family income of just under 29,000 euros per year.
At the same time, the recovery in employment continued its course: between 2019 and 2023, the number of workers increased from 23.1 million to 23.5 million. Puglia stands out positively, recording an increase of almost 79,000 workers in five years, corresponding to +6.5%. Followed by Veneto (+75,000 workers, +3.5%) and Sicily (+59,000, +4.4%). Only four regions saw a decline in the number of employed compared to 2019: Sardinia (-5,900 workers, -1%), Calabria (-9,800, -1.8%), Molise (-2,800, -2.6 %) and Piedmont, with a loss of over 15,000 employed (-0.8%).
