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Istat: family income and purchasing power on the rise in 2023, decrease in tax burden

In the third quarter of 2023, the National Institute of Statistics (Istat) announced positive results for the Italian family economy. According to the Quarterly Public Administration Accounts, the tax burden has decreased, reaching 41.2%, a 0.2 percentage point reduction compared to the same period in 2022.

Income, purchasing power, and savings on the rise

During the same period, the disposable income of consumer families increased by 1.8%, driving a 1.2% rise in consumption. The propensity to save for families is estimated at 6.9%, with an increase of 0.6 points compared to the previous quarter. The purchasing power of consumer families has increased by 1.3%, surpassing the 0.5% rise in prices.

Istat: resumption of purchasing power

Istat highlighted that the purchasing power of families has continued its recovery, which began in the first quarter of 2023. Despite a slight decline in the following quarter, the Statistical Institute emphasizes that this positive trend aligns with the propensity to save, which, although below pre-Covid levels, is gradually regaining ground.

Propensity to save and investments

The increase in the propensity to save is attributed to a nominal growth in final consumption expenditure less pronounced than that recorded for gross disposable income (+1.2% and +1.8%, respectively, in nominal terms). At the same time, the investment rate of consumer families stood at 8.0%, with a slight decrease of 0.1 percentage points compared to the previous quarter, alongside a growth in gross fixed investments of 1.0% and the previously mentioned increase in gross disposable income.

Istat: reduction in inflation in 2023

Preliminary Istat estimates indicate a significant reduction in inflation in 2023, dropping to 5.7% from the 8.1% recorded in 2022. Inflation continues to decline in December, reaching 0.6% annually compared to November’s 0.7%. Specifically, according to provisional data, in December 2023, the National Consumer Price Index (NCPI), excluding tobacco, increased by 0.2% on a monthly basis and 0.6% on an annual basis.

Positive outlook for family economy

The positive trend in income, purchasing power, and the propensity to save indicates a positive outlook for the Italian family economy in 2023. The reduction in the tax burden, albeit modest, represents relief for families, enabling them to maintain a more stable financial balance.

Conclusion

In conclusion, the data presented by Istat offer a positive outlook for the Italian family economy, with income and purchasing power on the rise, a reduction in the tax burden, and a decline in inflation throughout 2023. These combined elements paint an optimistic picture for the economic future of Italian families, suggesting increased stability and prosperity in the coming year.

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