Inflation, the report: -152 billion on current accounts in one year

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Current accounts of Italians affected by inflation and the cost of living: in the last year the total balance of bank deposits of families and businesses has collapsed by 152 billion euros, from 1,452 billion to 1,300 billion, equal to a reduction of 10.5% . The data refers to the period from October 2022 to October 2023, which saw Italian families draw on their savings to cope with the surge in prices, and then the increase in interest rates on loans, and which pushed the companies to use their bank reserves to replace debt, which has become too burdensome.

This is what emerges from a report from the Unimpresa Study Center, according to which part of the money in current accounts, around 85 billion, was moved to deposits for which banks recognize remuneration rates on average higher than 3%, while on current accounts the average is less than 1%. «Inflation is the worst and most unfair of taxes: it especially affects the weakest groups of citizens and limits the ability of businesses to invest to grow. The price index has fallen from 10 to 5 percent in the last year, but the damage is now there and there for all to see. The ECB’s care proved limited and limiting: at this point we need a reversal of the trend and the cost of money must be cut already in the first half of 2024″, comments the president of Unimpresa, Giovanna Ferrara.

According to the report by the Unimpresa Study Center, which reworked statistical data from the Bank of Italy, the total of private deposits fell from October 2022 to October 2023 by 78 billion euros (-4.5%), going from 1,701 billion to 1,623 billion. In detail, household reserves fell by 66 billion (-5.6%), from 1,170 billion to 1,104 billion.

The savings of companies decreased by 7 billion (-1.7%), from 409 to 402 billion, while those of family businesses decreased by 5 billion (-5.7%), from 87 billion to 82 billion. As regards non-profit organisations, however, the balance is unchanged at 35 billion.

«The reduction of inflation from over 10% at the end of 2022 to around 5% today has not led to a drop in prices. This is a virtual descent because in reality the cost of living continues to rise, with the only difference being that the curve is less steep than a few months ago. In short, prices are not going back. In essence, in just a few months, over the last year, the inflationary picture has changed as it had never happened in the history of the euro, albeit with certain differences and specificities within the euro area. As regards the balance of current accounts, the damage is immediate for families and businesses, whose piggy banks are much less rich than in the past; but the banking sector will also pay the bill as it will have less liquidity available to provide credit to customers, thus worsening an already highly negative situation”, comment the analysts of the Unimpresa study centre.

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