Households: wealth is growing only on paper. Risk of stagnation in the EU

LFinally, Europe appears to be the continent most exposed to the risk of a new period of secular stagnation, characterised by weak growth underpinned by insufficient investment, subdued demand and assets that continue to rise more as a result of financial valuations than of expansion in the real economy.

For the authors of the report, this is the scenario most reminiscent of the decade following the global financial crisis: wealth growing mainly on paper, but with modest productivity and investment failing to drive a lasting acceleration in GDP. Italia fits squarely into this European picture. Italian households continue to hold some of the largest wealth holdings amongst the major economies: with around 13 trillion dollars in net wealth, they are on a par with Canada and just behind the United Kingdom and France, whilst only the United States (175 trillion), China (75), Germany (23) and Japan (22) have higher figures.

Growth, however, appears to be much more modest than in other countries. McKinsey highlights that Italia, France, Germany, Austria and Portugal have recorded only slight nominal increases in wealth expressed in dollars, which actually turn into declines when measured at constant exchange rates, partly due to the appreciation of the euro against the dollar during 2025.

Among the most positive aspects, however, is the structure of Italian households’ wealth. The property market appears much more balanced compared with other advanced economies: whilst Australia, Canada, Belgium and the Netherlands continue to show very high property values relative to GDP, Italia has returned to levels close to its historical average, following the normalisation that took place after the pandemic years.

The country also continues to stand out in terms of private debt. The debt of Italian households remains among the lowest in the entire sample analysed, a far cry from the levels exceeding 100 per cent of GDP observed in Australia and Canada, and significantly lower than those in the United States, the Netherlands or South Korea.

The area of greatest vulnerability, however, remains the public sector. The report ranks Italy among the countries with the highest public debt-to-GDP ratio, second only to Japan and ahead of the United States. This is a factor that is becoming increasingly significant against a backdrop of higher interest rates than in the previous decade and weaker economic growth.

McKinsey’s conclusion is that the current level of global wealth can only be sustainable if it is accompanied by a new phase of growth in productivity. In the absence of this impetus, the alternatives are less favourable: a prolonged period of stagnation, a return to inflation as a rebalancing mechanism, or a genuine correction in asset prices. Three very different scenarios, united by a single message: ever-increasing wealth does not necessarily mean stronger economies.