On Wednesday, 14 December, the European Commission deemed Italy’s Draft Budgetary Plan for 2023 to be “in line” with the qualitative fiscal guidance defined in July, whereas the Stability and Growth Pact will remain ‘frozen’ until the end of 2023 due to economic uncertainty.
In particular, the European Commission is of the opinion that the growth in nationally financed public expenditure (whose impact is estimated at 0.9% of GDP in 2023 and 0.6% of GDP in 2024 and 2025, to which are added annual tax cuts of 0.2% of GDP over the 2022–2025 period) is still below Italy’s medium-term potential growth.
The Italian Draft Budgetary Plan is based on a forecast that expects national GDP to grow 3.7% in 2022 and 0.6% in 2023. The public deficit would be reduced from 5.6% of GDP to 4.5% of GDP between 2022 and 2023. Public debt will be reduced from 145.7% of GDP to 144.6% of GDP over the same period.
See the Commission Opinion: https://aeur.eu/f/4p7
More information on euro-area countries’ Draft Budgetary Plans: https://aeur.eu/f/46r (Original version in French by Mathieu Bion)