Between 2022 and 2025, despite cumulative inflation of 18.5%, Italian household incomes remained stable, allowing them to maintain average purchasing power. This is according to a report from the Unimpresa Research Center, which reprocessed data from the Bank of Italy.
During the four-year period, the automatic tax and social benefit mechanisms resulted in a total outflow of nearly €20 billion: €17.9 billion due to fiscal drag and €1.7 billion from the erosion of certain benefits. This effect slowed disposable income growth by about 2.5 percentage points. Several factors, however, offset this drain. Employment growth and rising earnings contributed significantly, while the government's economic and social policies poured €31.3 billion into household pockets, representing a positive contribution of roughly 4 percentage points. Overall, the resources returned exceeded those lost, resulting in a €11.7 billion surplus: on average, for every euro removed from taxes, families received nearly €1.6 in return. The end consequence is an increase in disposable income in accordance with inflation. From a distributional standpoint, the middle class is doing well, and inequality is declining. Average incomes have risen faster than prices; lesser incomes have kept pace, while higher incomes have remained below inflation. Pensioners have been stung the hardest, with income growth trailing behind price hikes. According to Unimpresa, a mix of state measures and labor market factors has kept the inflationary shock from causing widespread poverty among families.