Upb warns: new Irpef erodes employee benefits
"The line of prudence and responsibility on public finance has paid off and the account trends are appreciable even in the light of the deterioration of the international macroeconomic scenario"
5' min read
Key points
- Giorgetti: complicated context but 2025 GDP target achievable
- "I hope political forces will agree on accounting law to safeguard accounts"
- Upb, the macroeconomic framework
- Crucial challenges, environment and demography
- Significant risk not to realise NPNR spending by 2026
- For account-keeping decisive action on evasion
- With new Irpef increases fiscal drag, erodes benefits
5' min read
'The prospect of moderate growth for Italy, despite the downside risks to forecasts due to international trade and geopolitical tensions, is not ineluctable'. Thus the president of the Parliamentary Budget Office (PAB), Lilia Cavallari, when presenting the Fiscal Policy Report in the Senate. The development of economic activity can be helped - is the thesis - by a more decisive implementation of reforms and investments, even beyond the horizon of the NRP. And a further boost could come from the labour market, if participation rates continue to rise and the ability to attract skilled workers is strengthened.
"The line of prudence and responsibility on the public finance has given its results and the account trends are appreciable even in the light of the deterioration of the international macroeconomic scenario, but it must be maintained with commitment and constancy to keep the confidence of the markets, families and businesses high. We need vision and transparency,' she added, 'to ensure stable public finances and accompany the transformations of the economy and society, unlocking their growth potential.
Giorgetti: complicated context but 2025 GDP target achievable
An already fragile international framework deteriorated rapidly with the escalation of the trade war initiated by the United States of America. Estimates of the economic impact of the new trade barriers point to adverse effects that differ considerably between countries and sectors, but their quantification is subject to margins of uncertainty, linked to the reactions of the actors involved. Much will depend on the duration of the tariffs, the retaliation of other countries and the reactions of markets, companies, households and, not least, central banks. "Unfortunately, the current context also appears very complicated" in the eyes of Economy Minister Giancarlo Giorgetti, referring to the tariffs and the still ongoing conflicts that have led to the downsizing of growth estimates for the coming years on which weighs "the high cost of uncertainty". Despite this, Giorgetti described the 2025 target as 'fully attainable and hopefully surmountable'.
According to Upb estimates, the sectors of the Italian economy most affected by US tariffs would be the pharmaceutical industry, mining and motor vehicle manufacturing, with more significant job losses in the metal products, machinery and textile manufacturing sectors. The mining activity would mark a strong loss of added value, as it is strongly interconnected with the various manufacturing activities; relevant effects, although indirect, would concern some service sectors such as professional activities (architectural, engineering, legal, accounting and management firms), advertising and research and personnel services.
"I hope political forces will agree on accounting law to safeguard accounts"
."I hope here in the Senate that the political forces of majority and opposition can reach an agreement to approve together a new accounting law that, in incorporating the innovations introduced by the new European governance, reinforces the safeguards for the sound management of public finance and introduces effective mechanisms for the revision of spending, as Italy has committed to do in the SGP". This is how the Minister of the Economy concluded his speech at the presentation of the Budget Policy Report.
