tax pressure rises to 52%, household incomes and consumption fall

by time news

The tax burden is rising, household incomes and consumption are falling. Istat notes it. The tax burden was 52.0%, up 1.3 percentage points in the fourth quarter of 2020, compared to the same period of the previous year, despite the reduction in tax and social security revenues.

In the fourth quarter the disposable income of consumer households decreased by 1.8% compared to the previous quarter, and the related final consumption by 2.5%. Consequently, consumer households’ propensity to save was 15.2%, up by 0.5 percentage points compared to the previous quarter. Furthermore, according to the Institute of Statistics, compared to an increase of 0.2% in the implicit consumption deflator, the purchasing power of households decreased compared to the previous quarter by 2.1%.

“After the recovery in the third quarter, household disposable income marked a new decline which translated into a reduction in purchasing power. The savings rate increased again in the fourth quarter, due to the more marked contraction in spending on household final consumption “writes Istat commenting on the data.


In the fourth quarter of 2020, the net debt of the Public Administrations in relation to GDP was equal to 5.2%; in the same period of the previous year there was an accreditation of 1.9%, according to Istat. The primary balance of the PA (debt net of interest expense) was negative, with an incidence on GDP of -1.9% (+ 5.2% in the fourth quarter of 2019), while the current balance of the PA 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 has significantly increased in trend terms due to the reduction in revenues and the substantial increase in expenditure, due to the income support measures for families and businesses “comments Istat.


In the fourth quarter of 2020, the profit share of non-financial companies, equal to 43.6%, remained stable compared to the third quarter of 2020. The investment rate, equal to 21.6%, instead increased on a cyclical basis by 0.6 percentage points.

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