Public accounts, worse scenario: new government path and tight deadlines

Hypothesis of a light maneuver and then decree to avoid the provisional exercise

Revision of growth downwards, towards an increase in the estimates on deficit and debt compared to April. The unchanged policy Nadef that the government aims to approve by Thursday would outline a worsening economic scenario for 2023 compared to the April forecasts due to the persistence of the war and the rise in inflation.

As far as we know, with the Update to the Def, the estimated GDP trend for next year would be cut below 1%, probably between 0.7 and 0.8% compared to 2.3% and 2 , 4% programmatic. This revision would impact the denominator of the deficit and debt with a relative increase. Growth in 2022, on the other hand, would close with an estimated improvement of over 3% from 2.9% at unchanged policies indicated in April and 3.1% programmatic.

The worsening of the gross domestic product for the next year would lead to an additional 20 billion deficit, bringing the bar of the ratio with the GDP to almost 5% against the 3.7% trend and the 3.9% planned for the April Def. . In the wake of 2023, the forecast on public debt in relation to GDP would also worsen, rising above the estimated 145% indicated in April and the planned 145.2%. However, it is not certain that it will not continue to decline compared to 2022: the estimates of the Def indicate for this year 146.8% trend and 147% programmatic.

Without the Nadef, the government would also draw up the Budget Planning Document to be sent to Brussels by mid-October, indicating only the non-deferrable expenses and current expenditure. Meanwhile, the first meeting of the Chambers would take place on 13 October. It would then be up to the new government to present the maneuver and transmit it to Parliament for examination to be concluded by 31 December.

At this point there would be various hypotheses on the table. Among these, the possibility that the executive may vary a light maneuver in line with the Dpb for a quick examination in Parliament and then allocate the interventions for 2023 to a decree law, with any deviations or, among other hypotheses, to launch the actual maneuver but with a process that would promise to be heart-pounding to avoid the provisional exercise in the event of failure to go ahead by the end of the year.

But it is not only the timing that is restricted but also the path within which the executive could move. Almost 30 billion would be needed to confirm the minimum necessary measures. At a guess, in fact, to renew up to March the measures against the expensive bill of the Aid decrees, about 14 billion would be needed; for the indexation of pensions to increases in inflation up to 10 billion; for the cut of the tax wedge 3.5 billion. If the flat tax were also passed, the measures to cancel the Fornero reform and the strengthening of the tax wedge promised in the election campaign by FdI, Lega and Forza Italia, the bill would rise.