Tax pressure is rising again in Italy. In the first quarter of the year it was equal to 37.1%, up 0.8 percentage points compared to the same period of the previous year when it stood at 36.3%. Istat highlights this in the quarterly report on the public finances framework, adding that for the country the net indebtedness of public administrations in relation to GDP is improving: equal to -8.8% (-11.6% in the same quarter of 2023).
The big picture
The primary balance (i.e. the debt net of interest)
liabilities) was negative, with an impact on GDP of -5.3% (-8.5% in the first quarter of 2023). The current balance of the administrations was also negative, with an impact on GDP of -4.1% (-5.2% in the first quarter of 2023). SIstat reports that the public finance picture shows both light and dark sides with “improving debt and increasing tax pressure compared to the corresponding quarter of the previous year”.
Purchasing power recovers
Despite some setbacks in the previous quarters, “the purchasing power of families continues the recovery path that, thanks to the slowdown in price dynamics, had begun
in the first quarter of last year.” Household purchasing power increased by 3.3% compared to the previous quarter, slightly slowed by the increase in consumer prices (the implicit deflator of household consumption increased by 0.2% on a quarterly basis). The recovery also continues
of the propensity of families to save, which had reached
minimum in the last quarter of 2022: it increased by 2.6 percentage points compared to the previous quarter, reaching 9.5%.
