The economic and financial accounts during the COVID-19 public health crisis

In the first half of 2020, the primary income accounts of non-financial private sectors recorded the sharpest contraction of the last twenty years, only partly countered by the measures adopted by general government to sustain disposable income. The rebuilding of the financial transaction network between institutional sectors shows that the Bank of Italy and the banking system have played an important role in financial intermediation, recording a considerable expansion in balance sheets. By using the greater funding through deposits mainly from the subscription of public sector securities, the financial sector has also made possible for sectors with a financial surplus to indirectly fund general government. Between the end of 2019 and the end of June 2020, the half-yearly change in the debt-to-GDP ratio reached its highest levels in the last twenty years.