The first survey for 2016 of the ING Bank Financial Welfare Index (IBF) confirms the trend that emerged in 2015 towards an overall improvement in the well-being perceived by Italian families, who however show a certain caution with respect to future prospects. After the strong acceleration during 2015, a year that marked the reversal of the trend in the perception of Italians with respect to their economic situation after the years of the crisis, in April 2016 the index instead shows a more contained increase, settling at 44,8, 44,0 points from XNUMX in the previous semester.
Going into detail on the individual dimensions that make up the index, the perception improves with respect to disposable household income, which returns to pre-crisis levels for the first time, with households showing more confidence in the ability to face unexpected expenses and less worried about the increase in the tax burden and consumer prices, in a scenario characterized by stagnant inflation.
Satisfaction with the size of long-term debt also improves thanks to the persistence of very low interest rates, which lighten the burden of loan installments.
As far as investments are concerned, the index instead marks a slight retracement due to the high volatility of the financial markets and in particular of securities in the banking sector, which have a significant weight in the portfolios of Italian savers. Satisfaction with the ability to set aside savings also decreased slightly, which however remains at the highest values in the last 4 years.
In the national scenario, however, there are significant differences at the regional level, with the North West confirming itself as the area most affected by the improvement in economic conditions while, conversely, the North East continues to record a decrease in the index, in a context characterized by a high rate of unemployment.
Finally, from a demographic point of view, the trend of the index is confirmed as positive for the youngest segment of the population concerned, that between 18 and 34 years of age, while, for the first time after about 3 years of positive trend, in segment between 35 and 44 years the index shows a decline.
Paolo Pizzoli, Senior Economist of ING Bank, commented on the data as follows: “The dynamics of the financial well-being index appear to be consistent with the general evolution of the Italian economy which, during the survey period, continued to grow albeit at a moderate rate. In the wake of the first signs of recovery in 2015, Italians had raised their expectations but then had to deal with less vigorous growth than expected for the year and with the downward revision of estimates of GDP growth. These contrasting signals have probably favored the emergence of a wait-and-see attitude on the part of the Italians, waiting for more elements to clarify the overall picture. The progress recorded on the employment front, with a growing weight of permanent employees, has probably contributed to an increase in comfort relating to the income component. At the same time, the expansive monetary policy of the ECB, combined with the strong competitive pressure between banks, continued to reduce the cost of mortgages, positively affecting the comfort relating to the long-term debt component of the IBF. If on the one hand the low rates favored debtor households, on the other they weighed on the return on financial assets in the portfolio, compressing returns. Also considering the negative stock market performance of the first few months of 2016 and the high volatility, the decline in investment comfort reported by the ING survey should therefore not come as a surprise. It should be emphasized that the survey of the IBF was carried out in April, well before the British referendum on permanence in the EU took place. Its unexpected outcome, with the choice of Brexit, has opened a phase of uncertainty, to which the Italian economy will not be immune”.
The forthcoming survey of the Financial Welfare Index in the autumn of this year will be able to measure whether Brexit will also have had an impact on the well-being perceived by Italians.
