Italy experiences decade of growth marred by deepening inequality

ROME — While wealth in Italy grew over the last 15 years, the economic gap between high-income and medium-income families has also widened, a national report recently showed.

Italy is the third-largest economy in the European Union after Germany and France, and its total net wealth increased by about 14 percent between 2010 and 2023, according to the latest Bank of Italy's annual report.

However, the distribution of wealth was increasingly uneven and mostly benefited the wealthiest 10 percent of households, while middle-class families saw their relative share of wealth decrease.

In terms of wealth distribution, Italy's population can be divided into three groups — top, medium and bottom, the central bank said.

The top 10 percent of households accounted for 60 percent of overall wealth last year, while the bottom 50 percent — the poorest families — accounted for only 7 percent.

Compared to 2010, the share of wealth held by the most affluent decile of households has increased by some 7 percentage points, mainly at the expense of the middle group of households, the Bank of Italy reported.

The overall 14 percent increase in net wealth at current prices between 2010 and 2023 "was driven by very strong growth (an overall 29 percent) observed in the wealthiest 10th of households", the central bank explained.

Uneven distribution

The uneven distribution of wealth observed in the period was mainly due to disparities between high- and medium-income families in terms of assets they could put their money into.

Wealthy households could invest in a variety of instruments, largely in financial products, while medium-income families mainly invested in the domestic real estate market.

As such, the most wealthy benefited from "the positive performance of riskier financial instruments (such as shares and other equity, investment fund shares and life insurance products)", the Bank of Italy explained.

On the other hand, the economic decline suffered by the middle class (-4.8 percent) in the same period "was instead due to the fall in the value of the real estate, which was only slightly offset by the developments in riskier financial instruments".

As for Italy's poorest households, their net worth remained mainly stable.

"The level of inequality in Italy is currently in line with the eurozone and France, higher than in Spain and lower than in Germany," the central bank said.

XINHUA