Def, debt over 3,000 billion euros by 2025. Giorgetti: «We aim to adjust the accounts in 7 years»

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The government aims to «agree with the European Commission the extension to seven years of public finance adjustment” to put debt on a reduction path. And the future medium-term structural budget plan to be submitted to the EU «can only start from the results already achieved with the Pnrr», consolidating investments and reforms on the ecological and digital transition and responding «to the investment needs of defense and essential objectives of improving social equity and demographic recovery of the country”. The Minister of Economy Giancarlo Giorgetti writes this in the introduction to the Def.

Def, priority to refinancing the wedge cut

The Def reports an estimate of the so-called “unchanged policies for the next three years, within which priority will be given to the refinancing of the cut in the tax wedge on labour”. We read it in the Document sent to the Chambers. «Immediately, the Government intends to continue adopting measures aimed at intervening on the deficit profile, further improving it also through a review of the rules on tax credits in order to bring it back below 3 percent of GDP by 2026, as foreseen in the Nadef. These actions will be aimed at improving not only the accrual balances, but also the cash balances, thus lowering the profile of the debt/GDP ratio already in the short term”, continues the text.

Debt over 3,000 billion euros by 2025

Italy’s public debt will break the psychological threshold of 3,000 billion euros starting next year. This is what they predict the tables of the Def 2024, according to which from the 2,981 billion euros expected for this year, the total liabilities of the PA would rise to 3,110 billion in 2025, to 3,224 billion in 2026 and to 3,306 billion in 2027, the year in which a downward trajectory of the debt/total ratio would begin GDP.

The text of the 2024 Economic and Financial Document

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Growth improves despite the global picture

«At the start of the year, the economic prospects seem to have moved towards a phase of gradual strengthening of growth, despite the uncertainty deriving from a constantly evolving geopolitical context» we read further in the Economic and Financial Document. «In a context of increased resilience of the Italian economic system, the return of inflation and the easing of monetary policy should support an increase in demand».

Tax pressure at 42.1% in 2024, 42.4% in 2025

«The tax burden is reduced in 2024 to 42.1% (from 42.5% in 2023, ed.) to rise again in 2025 to 42.4% and settle at a slightly lower level in the final two years of the forecast period». We can read it in the part of the Def dedicated to ‘Public finance analysis and trends’. The total revenues of public administrations in relation to GDP will decrease, in 2024, by one percentage point compared to 2023, reaching 46.8%, and are expected to increase in 2025 by 0.3% percentage points and decrease in the following years , reaching 46.2% in 2027. Tax revenues are estimated to progressively reduce, from 29.6% in 2023 to 28.9% in 2027.