By Marzia De Giuli
ROME, Jan. 4 (Xinhua) -- The year 2012 was archived with bad news for the wallets of Italians, who in a period of economic difficulty have seen prices soaring at a pace not experienced since 2008.
Preliminary estimates released on Friday by national statistics institute Istat showed that the inflation rate for 2012 was 3.0 percent, the highest in four years. The so-called "trolley," or the set of goods and services representative of household consumption, hit a record high of 4.3 percent.
According to consumer associations Adusbef and Federconsumatori, during the last year inflation combined with record tax burden led to an extra average expenditure of 2,333 euros (3,044 U.S. dollars) each household.
Not only a sharp fall in spending is expected at upcoming New Year sales, but over 60 percent of Italians have reduced their shopping cart of common goods and 6 percent cannot even make ends meet, said a study by the largest farm association Coldiretti.
"People are being forced to adopt a series of strategies to save money," the head of Coldiretti economic research center, Lorenzo Bazzana, told Xinhua.
"Besides to compare prices and seek discounts, they always carry a shopping list and increasingly prefer to make purchases in small shops rather than wander all around the supermarket ending to fall into all the temptations placed in their way," he said.
The global crisis weighing on the debt-ridden country has led caretaker Prime Minister Mario Monti's 13-month emergency government to introduce a range of painful tax hikes and welfare cuts aimed at balancing the budget.
As a result, throughout the whole year 2012, the spread between the 10-year bonds and the German benchmark, a barometer of international investors' confidence, went down, but so did gross domestic product (GDP) and productivity while unemployment kept growing.
In November 2011, the spread hit the record of 574 basis points. Some 12 months later, it dropped below 365 basis points and over the past few days it has stayed well below 300 basis points level.
However, the many negative economic indicators of 2012 that was billed by local media as a "year of blood and tears" show that Italy is still far away from recovery.
Public debt increased by around 100 billion euros from 1,909 billion euros in October 2011 to over 2,000 billion euros in the same month of 2012, the ever highest record.
And despite Italy was able to stay under the Maastricht deficit and debt level of 3 percent with a better percentage compared to that of other European countries, the austerity drive has deepened recession, which could last until 2014, according to leading business association Confindustria.
Companies were especially affected as reflected by official figures regarding industrial production which decreased a working-day adjusted 6.2 percent year-on-year in the first 10 months of 2012, while tens of thousands of businesses were forced to close nationwide.
Fiscal pressure kept soaring and reached on average 55 percent of tax payers' incomes ranking first in the world, a study of the largest confederation of enterprises Confcommercio said.
Over the past year, banks were closing their lending taps. According to Italy's central bank, loans to families and enterprises decreased respectively from 618 to 610 billion euros and from 894 to 875 billion euros, triggering a record high drop of purchasing power and household saving.
The most alarming data, experts warned, were youth unemployment and the rocketing number of employees on temporary contracts. In October, people without a job were almost 3 millions, the highest number since 2004, according to official estimates.
Monti, who is tempting a second term, said that he needed more time as premier to finish the job of righting the economy, but his approval levels have eroded since he took the helm of Italy replacing Silvio Berlusconi.
The unclear political scenario ahead of national elections set on Feb. 24-25. adds fears about the future of the eurozone's third largest economy. (1 euro = 1.3 U.S. dollars).