In sharp decline compared to 2.4% put pen to paper last April
Downward estimates of GDP in Italy for 2023, with an expected growth of 0.6%, down sharply from the 2.4% reported last April. This is the ‘number’ written in black and white on the Update of the Economic and Financial Document, confirm government sources at the end of the Council of Ministers which gave the green light to Nadef.
For the current year, the trend level of gross domestic product is expected to increase by 3.3%, from 3.1% contained in the Def plan scenario in April, thanks to the higher-than-expected growth recorded in the first half and despite discounting a slight decline in GDP in the second half of the year.
Approximately 170 billion of the NRP remains to be spent, an “impressive” figure which, if fully utilized, “will make a significant contribution to growth starting from 2023”. The document explains that approximately 21 billion will be spent by the end of the year, of the overall plan of 191 billion.
The trend net debt in 2022 ” drops by more than two percentage points compared to last year, from 7.2% to 5.1%, against a programmatic target of 5.6%, thanks to a clear improvement in the balance primary ”, reads the draft. For the next year, a deficit under current legislation is estimated at 3.4%, “below the programmatic target of the Def (3.9%)”.
The debt / GDP ratio is expected to decline sharply this year, to 145.4% from 150.3% in 2021, with a further downward path in the following years to reach 139.3% in 2025. decline also in 2023 with the trend at 143.2%.
The public finance trends presented in the Nadef ” are overall reassuring, although the debt service becomes heavier ”, writes the Minister of Economy, Daniele Franco, in the draft approved by the Council of Ministers. ” It should be remembered that in 2024 the Stability and Growth Pact will come back into force in its version and will result from a consultation that the European Commission will open shortly on the basis of a proposal to reform the tax rules ”, adds the minister.
The update of the forecasts, through Nadef, ” highlights an increase in the path of inflation and wage growth. However, inflation rates are still expected to start falling by the end of the year, ” says Franco. ” Inflation has reached the highest levels of the last 40 years and – the minister recalls – has induced numerous central banks to put an end to expansionary policies, severely interrupting or reducing purchases of securities and undertaking a series of hikes in interest rates. interest that is unprecedented in recent decades ”.
” The increase in inflation has, at the same time, determined a dynamics of tax revenues that are far higher than the previous official projections ”, observes Franco. ” The government has monitored this trend and used the additional revenue generated to calm electricity and gas bills, to support the most vulnerable households, the companies most affected by the rise in energy prices and to mitigate fuel price increases ” ‘.
” The government concludes its work in a very complex geopolitical and economic phase, but with clear signs of renewed dynamism for the Italian economy ”. ” The hope – underlines Franco – is that, in a context of gradual reduction of the deficit and public debt, the economic recovery started after the pandemic crisis will continue and be consolidated, supported by private and public investments, by higher employment rates high and higher productivity dynamics ”.