The text of the Def approved by the Council of Ministers: priority for interventions to support families and businesses, GDP is expected to grow by 0.9% in 2023
On proposal of the Minister of Economy and Finance Giancarlo Giorgetti the Council of Ministers approves the 2023 economic and financial document for the three-year period 2024-2026
Il Def takes into account a economic and financial framework which, despite the easing in recent times of the negative effects deriving from the pandemic and the expensive energy, remains uncertain and risky due to the war in Ukraine, high geopolitical tensions, the rise in interest rates but also due to the emergence of localized crises in the international banking and financial system. In this context, the Italian economy continues to show a considerable amount of resilience and vitality. 2022 ended with the GDP up 3.7% and, despite the economic slowdown in the second half of the year, the most recent indicators, including the household and business confidence indexes, show that in the first few months of 2023 the country’s economy has started to grow again. The priority objectives that inspire and outline the government’s economic policy can be summarized in support for the growth and well-being of citizens, with new interventions in favor of families (in particular for the numerous ones, measures are also envisaged in the tax reform) e businesses as well as measures aimed at relaunching iinvestments and strengthen the country’s competitiveness; the sustainability of public finances with a gradual reduction of deficits and debt. The GDP growth forecasts contained in the document follow the path already traced by the November Draft Budgetary Plan (DPB) and by the budget law, confirming the prudent and realistic approach, aimed at showing seriousness and reliability both to the markets and to all European Union, and which aims to achieve more ambitious results.
Debt
In 2022 the debt/GDP ratio was equal al 144,4%, 1.3 percentage points lower than the forecast of the DBP last November. A decrease which, in line with the objectives indicated in the programmatic scenario, will continue to progressively decrease in 2023, to 142.1%, in 2024, to 141.4%, until it reaches 140.4% in 2026. However, the effects cannot be ignored reduction in the debt/GDP ratio that could have been recorded if the super bonus had not reduced the impacts on public finance balances that have been recorded so far.
Deficit
The Def points to gradually, but to a significant and sustained extent over time, the deficit and debt of the public administration in relation to GDP. Consistent with this objective, the Government confirms the net debt targets set out in last November’s document: 4.5% in 2023, 3.7% in 2024, 3.0% in 2025, up to 2.5% in 2026.
Pil
In the tendential scenario with current legislation, the GDP is expected to grow by 0.9 percent in 2023 (programmatic 1) revised data up from the November DPBin which growth in 2023 was set at 0.6 percent, 1.4 percent in 2024 (planned 1.5), 1.3 percent in 2025 and 1.1 percent in 2026 (same percentages in programmatic).
The estimate for 2024 is therefore revised downwards (from 1.9%) compared to last November. The projection for 2025 is in line with the DBP, while the expected deceleration for 2026 is due to methodological practices agreed at EU level.
Additional 2023 resources for tax wedge cut
Against an estimated deficit trend for the current year of 4.35 per cent of GDP, the maintaining the existing deficit target (4.5 per cent) will make it possible to introduce, with a measure to be implemented soon, a cut in social security contributions for employees with medium-low incomes of over 3 billion for the current year. This will support household purchasing power and contribute to moderating wage growth. Together with similar measures contained in the budget law, this decision demonstrates the Government’s attention to protecting workers’ purchasing power and, at the same time, to wage moderation to prevent a dangerous wage-price spiral.
Tax reduction
The Def also provides for a downward trend of the tax burden which should pass from 43.3 in 2023 to 42.7% by 2026.
Pnrr
The Government is working to obtain the third installment of the Pnrr. Interlocutions are underway with the European institutions for the revision and remodulation of some of the interventions envisaged by the pnrr and the related milestones and targets. The chapter of the program relating to the REPowerEU, which will include among other things also new investments. To make our country more dynamic, innovative and inclusive, it is not enough just the Pnrr. In fact, it is also necessary to invest to strengthen national production capacity and work over a longer time horizon than that of the Plan and which allows for the creation of suitable conditions to avoid new flare-ups of inflation. This is a theme that must be addressed not only in Italy, but also in Europe.