The current version of the public accounts for 2023 released by Istat today, which revised the deficit from 7.2% to 7.4% of GDP, differs from the one published on April 5th because it “incorporates the most recent evidence on spending for tax credits related to the Superbonus”. The technicians from the Institute explained during the hearing on the Economic and Financial Document. The information in the current version of the accounts is complete but not yet definitive, as there may be changes due to the natural stabilization of the data related to the assignment of tax credits in the coming months. Further changes in overall spending may also result from data on deductions taken from tax returns, which will only be available after the end of the year. However, given the limited use of the direct beneficiary option, it is likely that any revisions will be limited in amount.
The future prospects of Italy’s public accounts are influenced by uncertainties about the economy, mainly related to the uncertainties of the geopolitical scenario. This was highlighted by economists at Istat, who emphasized the importance of ensuring the full implementation of public investments and reforms planned in the National Recovery and Resilience Plan. In the hearing on the Economic and Financial Document, Istat’s technicians also noted that, in the current phase of stabilization of energy prices that began at the end of 2022, and in the absence of new shocks, the Economic and Financial Document outlines a gradual path towards the consolidation of public accounts, with the deficit falling below the 3% threshold of GDP in 2027 and the start of a debt-to-GDP ratio reduction path in the same year.
The technicians at Istat also highlighted that the current version of the public accounts for 2023 reflects the most recent evidence on spending related to tax credits for the Superbonus, which had a deadline for communication to the Revenue Agency set for April 4, 2024. The information included in the current version of the accounts is complete, although not yet definitive, as there may be changes in the near future due to the stabilization of data on tax credit assignments in the coming months. Additionally, further changes in total spending may arise from data on deductions derived from tax returns, which will only be available after the end of the year. However, given the limited use of the direct beneficiary option, any revisions are expected to be of a limited amount.
As Italy navigates the uncertainties surrounding the economic and geopolitical landscape, it is crucial to ensure the full realization of public investments and reforms outlined in the National Recovery and Resilience Plan in order to support the country’s economic recovery and stability. The path towards the gradual consolidation of public accounts, with a target of reducing the deficit to below 3% of GDP by 2027 and initiating a reduction in the debt-to-GDP ratio in the same year, will be essential in ensuring financial sustainability and long-term economic growth. The fluctuations in energy prices and potential future shocks are factors that will need to be carefully monitored and managed to mitigate their impact on Italy’s economic trajectory.
