Irpef reform, tax wedge cut, more investments and sufficient structural growth to reduce the burden of public debt. From Cernobbio, to the Ambrosetti Forum, the Minister of Economy, Daniele Franco, indicated the route of the government’s economic policy. A change of gear that passes from the acceleration of economic growth.
«An intense recovery in GDP is underway, the third quarter is going well. For the end of the year the Parliamentary Budget Office expects a + 5.8%, we cannot exclude that at the end of the year it will be higher “, said the minister, underlining how” the data are encouraging. It is important that growth is rapid “, but” the most important challenge is to grow structurally higher than in the past “. Also because “once the crisis is over, the debt will be progressively reduced”. According to the government’s estimates, the debt / GDP ratio should already improve at the end of the year before falling more significantly in 2022. But only “at the end of the decade will it return to pre-pandemic levels. The important thing is that it is sustainable ».
In the meantime, the executive will implement the tax reform which will be centered “on the wedge and on the income tax” because the tax burden must be “as favorable as possible to the factors of production, in particular to labor. It will therefore be important to design a tax system that helps the country to grow in the medium and long term as far as possible ”.
Meanwhile, there are positive signs: «The latest economic data on investments (public and private) are good, for this year we estimate an overall increase of 15% and the percentage of GDP could rise to 20%. Physical and human capital investments are low in Italy, in 2018 the GDP was 18%, below the EU average, with a low public share but also the private one was not high “.
Franco then reiterated that there are no “magic wands” to get out of the crisis, but “a concerted effort by the country is needed.” We must be aware that designing the PNRR was not easy, but making it will be even more difficult ».