One of the two big problems at the origin of Italy’s low growth is that of consumption. (The other is investments, we’ll talk about that on a future occasion). Consumption is a component of internal demand that actually depends on economic availability, while in behavior one consumes more or less also based on expectations: the more uncertainty there is, the less one consumes. Well, the Confcommercio consumption indicator (Icc, one of the most precise macroeconomic indices, also used by Bank of Italy) in the latest survey in September “while showing an imperceptible improvement on an annual basis (+0.3%) – we read in the document – confirms the difficulties in demand for goods, unchanged after the heavy drop in August, and the more favorable trend of services (+0.8%)”. This weakness in consumption largely explains the low growth in GDP, which we expect to be around +0.6-0.7% for 2025.
Faced with employment that has reached its highest levels in the last two years; to an inflation that is firmly under control and well below 2% (it is estimated at 1.6%); to a situation in the financial markets that shows health both on the stock market and in terms of the spread (with the recent overtaking to the detriment of France); Faced with all these indicators, Italians continue to consume less than we would expect. And, as if they feared the sudden appearance of some unexpected black swan, they prefer to save.
This is why in the financial package for 2026, just launched by the government, a large part of the available resources was dedicated to reducing the Irpef (rate from 35 to 33% on incomes between 28 and 50 thousand euros), the tax burden on contract renewals, and housing (renovation and furniture bonuses). About ten of the total 18.7 billion of the budget law were “put” into the pockets of about ten million taxpayers precisely to push them to consume and make the circle of tax cuts – albeit small – virtuous. For a taxpayer with a gross income of 50 thousand euros, this involves adding 440 euros during 2026, which are added to the 260 already received last year following the reduction of the Irpef brackets.
This is the logic with which the government moves which, having an always short cushion due to the constraints on deficit and debt, has chosen to use it on the side of lower taxes rather than on that of the retirement age.
Now the word goes to the Italians: will it be enough to restore some confidence? We will soon see this because the months preceding Christmas and the month of December itself, with the arrival of the thirteenth month, are the decisive ones for closing the balance sheet of a year of consumption. And to restart domestic demand.