Italy’s purchasing power halved since start of Russia-Ukraine crisis
According to a new study released on Monday by the Italian think tank Nomisma, purchasing power in Italy decreased by 54% over the previous year as high inflation, decreased trade, and slower economic growth brought on in part by the Russia-Ukraine crisis took their toll on Italians' day-to-day lives.
Rome, Italy | bazzup | According to a new study released on Monday by the Italian think tank Nomisma, purchasing power in Italy decreased by 54% over the previous year as high inflation, decreased trade, and slower economic growth brought on in part by the Russia-Ukraine crisis took their toll on Italians’ day-to-day lives.
The Changing World Observatory report did not include information from any other European nations.
A country’s wealth is measured by its purchasing power, or what one unit of its currency can purchase there. Residents must pay more for the same amount of goods and services when their purchasing power is reduced.
The new data exemplifies how the Russia-Ukraine conflict has dealt a new blow to the Italian economy, which were recovering from the economic slowdown caused by the COVID-19 pandemic. Energy prices have been rising, slowing industrial and agricultural production, impacting trade, and resulting in slower economic growth.
On the good side, Italy’s economy grew 3.9 percent last year, with most of the growth coming from the first half of the year, according to preliminary data from Italy’s National Institute of Statistics (ISTAT).
However, this growth was overshadowed by an 8.1 percent increase on average in the prices of goods and services during the same period, the report said. Including January (the most recent month for which data is available), prices increased by double digits year-on-year for each of the last four months.
Nomisma’s report also found that 26 percent of Italians feared not having enough income to last for a whole month, and the ability to save money for the future had decreased for 54 percent of Italians in 2022.
Overall, 14% of Italians claimed they earned less than they needed to in order to make ends meet, while 25% of those polled said they spent all of their income on necessities.
The results of Nomisma are based on extensive research done among a representative sample of Italians between the ages of 18 and 65.
Italy has historically been in the top tier in terms of purchasing power because products and services there are typically more affordable than in other eurozone states, despite the fact that its per capita GDP is below average for the eurozone.
