In 2023, Italian household disposable income increased by 4.7%, but after adjusting for inflation, their purchasing power decreased by 0.5%. The final consumption expenditure grew by 6.5% while the household savings rate dropped to 6.3%, down from 7.8% in 2022, reaching its lowest level since 1995. The household investment rate stood at 9.0%, slightly lower than the previous year. Despite a 6.2% increase in value added, the corporate profit rate declined to 44.8% from 45.4% in 2022. Additionally, households paid 24.6 billion euros in taxes, with personal income tax (Irpef) and capital income taxes increasing by 10.2% and 23.0%, respectively.
The Istat report indicates that in 2023, Italian households faced a total of 118.8 billion euros in redistributive measures, an increase of 16.5 billion euros compared to 2022. This trend was driven by a significant rise in current taxes paid by individuals, with businesses also experiencing a 7.5% increase in production taxes, totaling 2.2 billion euros. Furthermore, Italian businesses received a total of 55.2 billion euros in aid in 2023, with 23.8 billion euros in production subsidies and 31.4 billion euros in investment incentives. A significant portion of these subsidies were related to the Transition 4.0 Plan, reflecting ongoing support for productive activities and investments by both Italian and European institutions.
The economic pressures faced by Italian households in 2023 were evident in the reduction of their real purchasing power despite an increase in disposable income. The decline in savings rates and increasing tax burdens highlighted the challenges faced by families in maintaining their financial well-being. On the other hand, businesses continued to benefit from various support measures, including significant subsidies for production and investment activities. The allocation of 55.2 billion euros in aid to Italian businesses, both from domestic and European sources, underscored the efforts to sustain and boost economic growth and productivity in the country.
The data released by Istat for 2023 painted a complex picture of the Italian economy, with diverging trends between households and businesses. While households experienced a decrease in purchasing power and an uptick in tax payments, businesses saw a slight decrease in profits alongside increased production and investment aid. These contrasting developments reflected the broader economic challenges facing Italy, exacerbated by the lingering effects of the COVID-19 pandemic and ongoing efforts to stimulate growth and recovery. The significant role of government intervention and support measures in both household and corporate sectors underscored the importance of targeted policies to mitigate economic pressures and promote resilience.
Looking ahead, the trends observed in 2023 suggested a continued need for targeted policy measures to support household financial well-being and business vitality in Italy. With ongoing challenges such as inflationary pressures, tax burdens, and economic uncertainty, policymakers would need to focus on strategies to boost consumer confidence, encourage savings, and promote sustainable growth. The allocation of subsidies and incentives to support productive activities and investments would be crucial in driving economic recovery and ensuring long-term stability. By addressing the complex interplay between household and business dynamics, policymakers could work towards fostering a resilient and inclusive economic environment in Italy, supporting both individual prosperity and overall growth.
