“In 2024, GDP will stop at 0.8%. As the workload eases, public finances are at risk.

The government’s 1% growth target for this year is moving away, and the resources needed to achieve it are being found Maneuver 2025 It becomes more and more complicated. The cold drizzle on the government’s estimates comes during the hearings on the structural budget plan in Parliament: for the Bank of Italy, the 2024 GDP will stop at 0.8%, and also for the Parliamentary Budget Office, the 1% target becomes more uncertain. There is the external context, with the global economy slowing, and there is the post-Covid momentum that has run out in Italy. The weak framework affects the composition of the measure, and the Bank of Italy warns of the following moves: By making social security contributions structural, the pension balance is at risk. Economy Minister Giancarlo Giorgetti has always considered the 1% target “realistic.” But after a review of the quarterly economic accounts published by the Estate Institute last Friday, the Bank of Italy made a “mechanical correction” downward by two-tenths of a percentage point, which is pressuring GDP to 0.8%. At the parliamentary hearing, Estat explained that Italy had returned to growth at zero.

“We have returned to a ‘steady state’ phase with fairly low growth rates that struggle to reflect the status of an economy that is constantly evolving,” said Giovanni Savio, director of accounting at Istat, explaining how some “driving forces” have died in the post-Covid phase. “So we have to wait for other forces to emerge” to push GDP. Sergio Nicoletti AltemariThe head of the Economics and Statistics Department at the Bank of Italy tries to clear the clouds by talking about accounts that “show an encouraging trend” during the year.

Risks

But this is not enough, and therefore “the program described in the PSB is not risk-free.” First, because the plan relies on increased revenues expected for 2024, “with the implicit assumption that it is completely permanent.” Second, because given the “significant uncertainty” surrounding the overall picture, “even small deviations from budget plans may make it difficult to return” the deficit to below 3% in 2026. Moreover, the report invites us to consider the intention to make The deficit is less than 3% in 2026. Structural Social Security contributions to work: “The balance between contribution income and expenses versus benefits will be lost,” which is “the strength of our Social Security system.” Even for the Accounting Council, the government has a difficult task ahead of it. The path of the General Audit Office is “difficult” and in this maneuver “difficult choices about resource allocation will be required,” as the accounting judges explained to Parliament. However, we cannot help but think about healthcare, because in order to reduce waiting lists and emergency room times, it is necessary to invest “to overcome the shortage of staff, especially nursing staff, which currently represents the main deficit.” Moreover, it is necessary to give certainty and stability to the retirement sector, “after the temporary interventions that have characterized it in the last five years,” and try to “ensure greater flexibility in exit.” The CBO points the finger not only at uncertainty about the big picture, but also at a lack of information about coverage because, far from the $9 billion deficit, the CBO only provides “general” indicators. Local authorities, who have not yet addressed any hypothesis for reducing resources, have come forward. For municipalities, any request for contributions to revive public finances will become “extremely burdensome.” While the regions want reassurances on the “currently frozen” issue of reducing Irpef rates from 4 to 3, which would have an impact of around 1 billion on the additional tax for regions with ordinary law and around 400 million for those with special law. Doubts will be answered tomorrow by Minister Giorgetti, who will close the session of hearings on the PSB in Parliament.