Household incomes, Bank of Italy: “In Italy and Spain in 2020 they fell despite state aid. In France and Germany a slight increase”

Household incomes, Bank of Italy: “In Italy and Spain in 2020 they fell despite state aid. In France and Germany a slight increase”
Household incomes, Bank of Italy: “In Italy and Spain in 2020 they fell despite state aid. In France and Germany a slight increase”

In 2020 i income from work and property of the families ofarea dell’euro I’m dropped by 3.1% at current prices, the sharpest decline since the start of monetary union. However, the sector’s gross disposable income increased slightly compared to 2019 (0.2 per cent) thanks to the exceptional expansion of social transfers online in favor of families. A report of Bank of Italy. Although public interventions have supported income, i consumption fell by 7.6 per cent. Household consumption expenditure had always grown in the last twenty years, with the exception of 2009, when the decline was however much more contained than that caused by the pandemic.

The joint dynamics of gross disposable income and consumption therefore led to an increase, in the area as a whole, of ratio of gross savings to gross income available, from 13.1 to 20% between 2019 and 2020. The increased savings were not channeled towards investments, which on the contrary decreased, but led to an increase in the financial balance in relation to gross disposable income (from 3.9 to 11.3 per cent). In per capita terms, the financial balance went from just over 800 euros in 2019 to almost 2.400 euro in 2020.

In the comparison between the four largest economies of the area, the pandemic crisis has hit primary incomes especially in Italy e Spain, with a reduction of about 7% at current prices: net social transfers, which grew significantly in both countries, cushioned the impact on income without, however, being able to fully counterbalance it. In the two countries, gross disposable income fell by around 3%. The families French e German, on the other hand, they suffered a less marked reduction in primary income (-3.6 and -1.2 per cent, respectively) which, added to net social transfers, pushed gross disposable income to a increase just under 1 per cent in both countries. Italy and Spain have also been united by a decline in household consumption of more than 10 per cent at current prices, compared with less pronounced, albeit large, reductions in France and Germany (-6.6 and -5.4 per cent, respectively).

This resulted in a greater increase in the gross savings of Spanish and Italian households compared to 2019 (respectively from 6.3 to 14.7 per cent and from 10.1 to 17.6 per cent in relation to gross disposable income). The gross savings rate also rose sharply in France and Germany where, starting from high levels even before the crisis, it largely exceeded 20%. In all countries, the gross savings rate has reached levels never recorded in the last twenty years.

As in the area as a whole, gross investment in housing and fixed assets also fell sharply in the main economies, especially in Spain, France and Italy, resulting in an increase in the financial balance in relation to gross disposable income in all four countries. , in particular in Spain (from 0.4 to 9.9 per cent) and in Italy (from 1.9 to 10.4 per cent); the increase was below average in France and Germany. The financial balance of euro area households resulted in a growth of financial assets for an amount equal to 4.1 per cent of the previous year’s balances: such a high value was observed only in 2005. The expansion was greater in Germany and France, more moderate in Spain and Italy, where however there have not been such high growth rates since 2006.

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