Household consumption in Italy and Spain: structural and cyclical trends

Household consumption is a key indicator of the health of the Italian and Spanish economies, accounting for more than half of GDP, as in most developed countries. Household consumption in Italy and Spain has undergone major changes since the mid-1990s: driven by a significant rise in living standards, household consumption in real terms has risen sharply, particularly consumption of services, profoundly altering the structure of consumption. However, the pandemic , followed by the energy crisis, “ reshuffled the deck ” , altering the trends previously observed. After plummeting during the health crisis, household consumption in Italy and Spain bounced back, but remains below its pre-pandemic trend. In 2024, with inflation expected to rise at a slower pace than wages, household consumption should start to show positive momentum. In the longer term, consumption in Italy and Spain could be affected by an ageing population and the effects of climate change.