Budget hearings began today in the Senate and House Appropriations Committees Update note on the economic and financial document that will arrive on Wednesday in the halls of Palazzo Madama and Montecitorio. We are therefore seeking approval of the budget deviation and using the leverage of the deficit to balance the books.
Representatives of the CNEL, Istat, the Court of Auditors and the Bank of Italy are expected to attend the hearing today, as well as the Parliamentary Budget Office and the Minister of Economy Giancarlo Giorgetti tomorrow.
“The latest economic indicators suggest that the weak phase of the Italian economy will continue in the coming months.” That’s what we read in Istat report submitted to Parliament.
“Taking into account the trend of international exogenous factors, slowing growth elements are also related to tighter credit access conditions for families and businesses and the slow recovery of family purchasing power.” According to Istat “The investment incentive provided by the funds of the National Recovery and Resilience Plan is likely to become more effective from 2024; The implementation of the public investments and reforms envisaged in the PNRR will be extremely important in achieving the government’s growth objectives.”
Furthermore, “with reference to the second quarter of the current year, the weakness of household spending is confirmed, although it is still increasing (the quarterly change is +0.2%, after +0.6% in the first)”.
Istat: Contract wages +2.7%, but purchasing power falls due to inflation
During the hearing at Palazzo Madama before the joint budget committees of the House and Senate, Istat noted: “Based on the CCNL increases that already came into effect at the end of August, there would be such.” in 2023 a growth in contract wages of +2.7% (+2.7% in agriculture, +3.2% in industry, +1.3 in services and +3.8% in PA), with a further decline in the purchasing power of contract wages given the acquired inflation (IPCA), up 5.4% in August. In the three-year period 2021-2023, the gap between inflation dynamics and contract wage growth for the economy as a whole would be about 12 percentage points.”
Istat, increases of over 10% for 58% of goods in 2019
In September, of the over 400 aggregated goods that Istat used to calculate inflation, “over 58% experienced a 2019 average price increase of at least 10%. More than half of this was food.” . This is one of the data presented by Istat during the Nadef hearing. “For more than 17% of the aggregates, increases of no less than 25% were recorded, in the food sector alone the figure was 13%,” added President Francesco Maria Chelli. “In addition, the price increases in the period under consideration were greater in 5.2% of the cases,” or equal to 40%. The decline is only 6.7% of aggregates.”
Istat: Real wages below 2009 level
Real wages are again below 2009 levels. Due to exceptional price growth in 2022 (+8.7% measured by HICP) The difference between the increase in inflation and the increase in contract wages was 12 percentage points over the entire period (2009-2023).. The difference in growth between wages and prices varies in different sectors: it ranges from 4.1 points for agriculture and 4.7 points for industry, from 13.6 points for private services to 19.5 points for public administration.