The deficit / GDP in 2020, and that is overall in the four quarters of last year, soars to 9.5%, a marked worsening compared to the 1.6% of the corresponding period of 2019, according to Istat. In terms of incidence on GDP, in 2020 the primary balance and the current balance were negative, equal to -6% (+ 1.8% in 2019) and -4.3% (+ 1.7% in 2019) respectively. ). In the fourth quarter alone, the deficit / GDP was 5.2%; in the same period of the previous year there was an accreditation of 1.9%.
The public administration deficit is increasing
The primary balance of Public Administrations (debt net of interest expense) was negative in the fourth quarter, with an incidence on GDP of -1.9% (+ 5.2% in the fourth quarter of 2019), while the current balance of Public Administrations was positive, with an incidence on GDP of 1.5% (+ 5.6% in the fourth quarter of 2019). As in the first nine months of the year, the incidence of the general government deficit on GDP significantly increased in trend terms due to the reduction in revenues and the substantial increase in expenditure, due to the measures to support the income of families and businesses.
52% tax burden
Meanwhile, the Italian tax burden in the fourth quarter of 2020 was 52%, up by 1.3 percentage points compared to the same period of the previous year, despite the reduction in tax and social security revenues. This was reported by Istat, which for the fourth quarter of 2020 also recorded an increase in the propensity to save of consumer households: 15.2% (+0.5 percentage points compared to the previous quarter). This increase derives from a decline in final consumption expenditure that is more sustained than that recorded by gross disposable income (-2.5% and -1.8% respectively).
The propensity to save increases
The investment rate of consumer households in the fourth quarter of 2020 was equal to 5.7%, or 0.1 percentage points lower than the previous quarter, against a decrease in gross fixed investments of 2.7% and the a 1.8% decrease in gross disposable income was reported. Consequently, consumer households’ propensity to save was 15.2%, up by 0.5 percentage points compared to the previous quarter. Against an increase of 0.2% in the implicit consumption deflator, the purchasing power of households decreased compared to the previous quarter by 2.1%.