Bank of Italy: household spending down due to lockdowns and Covid fears

• Bank of Italy: "Slower than expected recovery in 2021"

• Consumption: Confesercenti, 137 billion lost in a pandemic year

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March 30, 2021 Italian families reduce spending in the Covid crisis but to affect this behavior are mainly the measures to close the lockdown and fears of contagion while the decline in revenues appears to be less.

This is what emerges from the Bank of Italy survey on Italian families according to which "consumer behavior continues to be strongly affected by the health emergency. The expenditure made in November for clothing, hotels, bars and restaurants is lower than the period preceding the pandemic for about 80 per cent of families; that in personal care services for about two thirds of them ".

A decline that affected to a greater extent the regions that at the time of the survey were in the red and orange zone.

However, notes the central institute, "just under half of those who have reduced these expenses indicate that the contraction is due to lower economic resources. Among other reasons, the fear of contagion prevails, regardless of the severity of the restrictive measures in the region of residence. ".

Just under a third of Italian families plan to reduce consumption for food, clothing and footwear and goods and services for the home in the first months of 2021;

of these, for about half the contraction in expenditure would be less than 20 per cent, for just under a third it would be higher than 30 per cent.

Almost half of the families who intend to reduce these expenses declare that they want to buy goods of lower quality;

three quarters think of modifying the quantity.

Expectations of a decline in consumption would mainly affect households that at the time of the interview resided in the red and orange regions and also just over a quarter of those who expect an increase in income in 2021 ".

Due to the pandemic "almost 40% of tenants and over 30% of indebted families have difficulty in paying the rent or debt installments" claims the Bank of Italy. Since the beginning of the epidemic "about 15% of households have applied for or have considered the possibility of applying for a loan from a bank or a financial company, indicating as the main reason the need to have liquidity and to finance current expenses".

And "beyond the half of the population - underlines Palazzo Koch - lives in families who declare that they do not have sufficient financial resources to maintain a minimum standard of living for at least three months

in the absence of revenue, in line with what was recorded in the spring.

More than a fifth of individuals are in this condition and at the same time suffered a decline in family income in 2020 ".

According to the survey," the assessments on Italy's general prospects have become overall more negative than to the summer survey, but remained less pessimistic than those formulated between the end of April and the beginning of May, a period strongly marked by the first lockdown ": from the sample" the percentage of households expecting a clear worsening of the general economic situation in the following twelve months it increased by 9 percentage points, against a reduction in the share that prefigures stability. "More than a third of families expect a marked deterioration in the conditions of the Italian labor market in the following 12 months; the outlook is more negative for the self-employed and the unemployed More than one fifth of the families with fixed-term contracts

and one tenth of the self-employed believe that the probability of losing their job in the next twelve months is more than 50 per cent;

among the unemployed, only a little over 10 per cent expect that there is a probability of more than 75 per cent of finding a new job within a year "." The pandemic - notes the Bank of Italy - has hit the families of self-employed and unemployed: more than half reported a decrease in income during 2020 ".