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Home English Household income, spending up, but profits down in 2014
ROME

Household income, spending up, but profits down in 2014

English
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Rome, April 2 - Italian households' disposable
income and spending increased in 2014 even though purchasing
power was flat, Istat said on Thursday.
But the national statistics agency also reported some
negative news for the economy - which seems to be on the path to
recovery after years of negative and flat growth - including a
sharp drop in business profits.
Non-financial companies' profits fell to their lowest in
2014 since records began in 1995, Istat said after its profit
index fell 0.8 percentage points to 40.6%.
This was the latest in a string of yearly falls, it said.
The most positive data was the 0.5% increase in household
spending last year with respect to 2013, the first increase
after two years of consecutive drops, Istat said on Thursday.
Spending dropped 1.3% in 2012 and 1.8% in 2013, after a
rise of 2.9% in 2011.
Weak consumer spending has been blamed for contributing to
Italy's long downturn.
This rise in spending was higher than the 0.2% rise in
Italian households' disposable in 2014.
The increase did not translate into greater spending power
though.
Istat said that Italian households's purchasing power was
flat last year with respect to 2013 when inflation is accounted
for.
It added that purchasing power was 0.5% down in the fourth
quarter of 2014 with respect to the previous three months, but
0.8% up on the same period in 2013.
The agency said Italy's deficit-to-GDP ratio for 2014 was
3%, bang on the limit allowed by European Union regulations and
0.1 of a percentage point up compared to 2013.
It added that the public sector deficit in the fourth
quarter of last year was 2.3%, up 1.1 percentage points on the
same quarter in 2013.
Istat also said tax-to-GDP ratio for 2014 was 43.5%, 0.1
of a percentage point up with respect to the 43.4% of 2013.
In the fourth quarter it was 50.3%, also up 0.1 of a
percentage point on the same period in 2013.
This data led to a political row, with Giovanni Toti of
Silvio Berlusconi's opposition, centre-right Forza Italia saying
that Premier Matteo Renzi's government was to blame for hiking
up the tax burden.
Members of Renzi's centre-left Democratic Party (PD) hit
back, saying Toti needed to have arithmetic tutoring, as he was
not taking account of the government's 80-euro-a-month income
tax bonus.
The bonus did not contribute to bringing down the
tax-to-GDP ratio, as statisticians considered it a form of
social spending, rather than a tax cut.

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