An Economic and Financial Document (DEF) 2024 what the government is preparing to launch is ‘dry’, the last in the current version before the entry into force of the new European governance. While awaiting the definition by the European institutions of the new Stability Pact and related programmatic documents, the Def this year will limit itself to the trend framework which will be very similar to that of the Nadef of September 2023.
“We want to respect exactly the Nadef objectives that we presented last autumn. It is a question of credibility. If there is something to correct we will correct it, but essentially we are in line”, are the words of the Minister of Economy and Finance , Giancarlo Giorgetti, on the sidelines of the second Selecting Italy edition in Trieste.
The drafts circulating between the Mef and the Presidency of the Council, subject to variations until the last moment, report GDP growth for the current year at 1%, a little below the 1.2 % forecast in the Nadef, while for 2025 the domestic product, with current legislation, is estimated to grow by 1.2% (against 1.4% in the Nadef) and then fall in 2026 to 1.1% (the Nadef estimated 1%).
As for public finance data, the deficit/GDP ratio in 2024 should be confirmed at 4.3%, the same level as the Nadef programmatic framework. For 2025, however, the bar should be at 3.7% against 3.6% of the Nadef and for 2026 at 3% (instead of 2.9%). This should be the trend without considering interventions such as the extension of the tax wedge cut and the three-rate IRPEF.
It is not excluded, and this is the reflection currently underway at the Mef and at the Presidency of the Council, that these two interventions could also be considered in the table of so-called ‘unchanged policies’, in addition to the international peacekeeping missions, the resources for public contracts and other measures, for a total of around 20 billion for next year, for which coverage must be found.
The debt should also remain in the current year at a level close to that of 2023 when it was at 137.3%. Based on the latest assessments, in 2024 it should be around 138% and perhaps slightly below.
The repercussions of the superbonus on public finances seem to be under control, even after the latest decree being examined by Parliament which, in addition to having further restricted the areas of application, eliminated the remission into performing status which exposed it to possible ‘unforeseen events’.
In this framework, the structural correction of 0.5% per year, which should be requested by the European Commission following the excessive deficit procedure, which Giorgetti takes for granted, should already be substantially incorporated.
There remains the great unknown of the resources to ensure the cutting of the tax wedge and the three-rate IRPEF also in 2025, thus avoiding the increase in taxes. The government is taking its time, preventing the debate from interfering in any way with the European elections in June and trusting that the new Commission can be understanding. The medium-term structural fiscal plan envisaged by the new governance, which on a transitional basis will be presented by 20 September, with the ‘reference trajectory’ of primary spending, should resolve the issue.
