Here is what the impact of inflation will be for families and businesses

The Ukrainian crisis is having a strong impact on both Italian businesses and households due to the increase in the cost of raw materials, energy and food. Intesa Sanpaolo's Studies and Research Department estimates an increase in expenditure of € 188 billion in 2022 for the purchase of goods and services by Italian companies compared to the pre-war period. Negative consequences are expected for the national GDP, which will decline from 4.3% to 3%, with Italian companies experiencing a contraction in their gross operating margin: the GOP / turnover ratio, initially calculated at 9.1% for the current year, is expected to drop to 8.6%.

It is also expected that the increase in the cost of energy will be structural, and it is unlikely that it will return to pre-war prices. Companies will therefore have to make investments to reduce their energy dependence, especially for those operating in the most energy-intensive sectors, such as transport, construction and chemicals.

Italian families will suffer the impact of the increase in energy costs and foodstuffs in a differentiated manner according to the income brackets. The most affected will be the poorest families, who allocate a larger share of their income in percentage terms to the payment of bills and the purchase of food.

Spending on food and electricity and gas accounts for 35% of the total expenditure of the fifth of poorest households, against 25% for the fifth of households with the highest incomes. In addition, households with higher incomes are more likely to have a positive and sufficiently large savings rate to absorb the higher costs without the need to reduce other expenses. Not so for families with lower incomes. The increase in the prices of essential goods therefore risks worsening social inequalities and widening the area of ​​hardship and poverty.

The price index for electricity, gas and other heating fuels is estimated to have increased by 57% this year compared to 2021, and by 83% compared to 2020. The price increases of oil and natural gas, to them time, they are having important inflationary repercussions on the prices of other goods, starting with foodstuffs, which could record average increases of 7-8% in 2022.

The additional burden per household is on average € 2000, with a minimum of € 1462 for the poorest quintile and a maximum of € 2495 for the richest quintile. The wealthiest families will be able to absorb the higher costs by drawing on their share of savings, something that lower-income families will be able to do with much more difficulty, which – in the absence of support policies – will be pushed to consume less.