Italian Household Consumption Lags European Peers After Years of Inflation Squeeze

Italian household consumption has endured one of the sharpest real-terms contractions among major eurozone economies since 2019, with inflation-adjusted spending falling 8.7% between 2019 and 2025 — a virtual loss of €224 per family — even as nominal outlays climbed, according to analyses by the Centro di formazione e ricerca sui consumi (Crc) and Codacons, both based on Istat data published in October 2026.

The divergence between rising price tags and shrinking purchasing power has left Italy's domestic demand structurally weaker than that of Germany, France and Spain, raising fresh concerns about the eurozone's growth outlook as 2027 approaches. A partial recovery is now visible in 2026, but analysts and consumer groups warn it remains uneven and fragile.

What happened

Between 2019 and 2025, nominal monthly household spending in Italy rose from €2,560 to €2,782 — an increase of roughly €222 per household. Yet once the cumulative price increases triggered by the Covid-19 pandemic, the war in Ukraine and the energy crisis are stripped out, real consumption contracted by 8.7%, according to the Crc analysis of Istat data released on 12 October 2026.

Furio Truzzi, president of the Crc's scientific committee, described the outcome as paradoxical.

"Il forte aumento dei prezzi al dettaglio registrato negli ultimi anni ha prodotto una situazione paradossale: gli italiani spendono di più per acquistare sempre meno."

Truzzi made the remark in the context of the Crc's October 2026 analysis. The Codacons study, covering the decade from 2015 to 2025 and also based on Istat data, corroborated the finding: food spending alone rose 25% in nominal terms over ten years, while non-food consumption grew by only 8.4%, and several discretionary categories recorded outright declines.

How did spending patterns shift?

The composition of Italian household budgets changed markedly over the period, with necessities absorbing a growing share of income at the expense of discretionary categories.

• Food and non-alcoholic beverages: monthly outlay rose from €441 in 2015 to €552 in 2025, an extra €1,326 per year per family.
• Ready meals and food preparations: up 254% over the decade, adding €307 annually per household.
• Coffee and cocoa: up 67% (+€99 per year); oils and fats up nearly 38% (+€65 per year).
• Meat and vegetables: up roughly 20%; sugar and confectionery +21%; milk, eggs and cheese +17%; bread +14%.
• Recreation, entertainment and culture: down 16.7% over the decade.
• Clothing and footwear: also reduced, according to the Codacons analysis.

Istat data further show that in the most recent year covered, one in three Italian families cut spending on food and beverages, 44% reduced clothing expenditure, 38.2% trimmed personal-care purchases, 25.4% cut healthcare outlays, and nearly half — 45% — modified their travel habits.

Regional disparities

The contraction was not uniform across Italy. Puglia recorded the steepest real decline in household spending, down 18.7% from 2019 to 2025, followed by the province of Bolzano (–17.2%, reflecting the area's above-average inflation) and Calabria (–14.9%). By contrast, Umbria saw real family spending rise 9.9% over the same period, with Marche (+9%), Trento (+8.2%) and Abruzzo (+6.1%) also posting gains.

Why it matters

Italy's consumption weakness matters for the broader eurozone because domestic demand is the primary engine of GDP growth in a large, relatively closed economy. While Germany, France and Spain also faced inflationary headwinds after 2022, Italy entered the cycle with structurally lower wage growth and a longer legacy of stagnant real incomes, amplifying the squeeze on purchasing power.

European Central Bank Chief Economist Philip Lane noted on 9 October 2026 that eurozone wages are not rising at a rate that would trigger inflation alarms — a signal that the wage-price spiral feared in 2022–2023 has not materialised, but also that real income recovery across the bloc remains modest. For Italy, where nominal wage growth has historically lagged peers, the implication is that the gap in household purchasing power relative to Germany, France and Spain may close only slowly.

The Codacons analysis underlines that higher food bills do not reflect fuller shopping baskets: climate-driven commodity price spikes, the Ukraine war's impact on cereals, dairy and oils, and energy costs passed through to retail prices all contributed to a situation where more money buys less.

Signs of recovery in 2026

A tentative improvement emerged in 2026. Real per-capita consumption reached €23,261 in 2026, up €314 from 2025 and above both pre-Covid levels and the previous cycle peak of €22,975 recorded in 2007, according to data published on 10 August 2026. The recovery was attributed to employment growth and rising incomes, though the report noted that not all spending segments have fully recovered.

Technology, communications and leisure-related services were cited as the strongest-performing categories in 2026, reflecting a shift in consumer priorities toward digital and experiential spending even as traditional discretionary categories such as clothing and culture remained under pressure.

What to watch next

Several data points and policy decisions in the coming months will determine whether Italy's consumption recovery broadens or stalls.

• Eurostat household consumption data for Q3 2026: will provide the first cross-country comparison of Italy, Germany, France and Spain under comparable methodology for the current year.
• Istat consumer price and spending releases: monthly updates will show whether the nominal-real gap is narrowing as inflation moderates.
• ECB monetary policy decisions: with Philip Lane signalling no noticeable pickup in eurozone wages as of October 2026, the pace of any rate adjustments will directly affect household borrowing costs and disposable income across Italy and its peers.
• Italian wage negotiations: sectoral contract renewals in late 2026 and early 2027 will be a key indicator of whether real purchasing power can be restored more broadly.
• Regional policy measures: the sharp divergence between southern regions such as Puglia and Calabria and central regions such as Umbria and Marche points to a structural challenge that national consumption aggregates may obscure.

The risk to the recovery scenario is that price levels — particularly for food, energy and services — remain elevated even as the rate of inflation slows, meaning that the cumulative loss of purchasing power since 2019 is not reversed but merely stops widening. For Italian families in the south and in high-inflation provinces, that distinction is already a lived reality.