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IMF: “Italian GDP will grow by 1.1% in 2023 and 2024. We must reduce debt”

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Italy’s GDP will grow by 1.1% in 2023 and 2024 and then accelerate further in 2025, thanks in part to the support of the Pnrr. The International Monetary Fund, which revised its growth forecast for Italy upwards from the 0.7% set for this year in its April report. The economy minister also spoke about growth forecasts for Italy, Giancarlo Giorgetti, at the Trento Festival of Economics. “I think a GDP of 1.2-1.4% bodes well. Looking at the German economy, I deduce that it will create problems for our industry, but there are services that should compensate. The government has always been cautious about estimates,” Giorgetti said.

The Pnrr’s thrust on growth

Meanwhile, according to the Monetary Fund, Italy hopes to compensate for the German slowdown with the investments made as part of the Recovery and Resilience Plan: the full and timely implementation of the Pnrr is necessary to increase productivity and stimulate growth, states in in fact the IMF in the note released at the end of the ex Article 4 mission in our country. “Given the high government debt and tighter financial conditions, it is advisable to save windfalls from inflation and accounting changes. A credible medium-term debt reduction plan would further reduce debt-related risks,” Washington’s technicians warn.

IMF: greater fragmentation of the economy

“The increase in geopolitical tensions raises the prospects for greater fragmentation of the global economy, which could lead to significant losses in output and greater price volatility if the flows of goods, knowledge and capital are interrupted,” the IMF explains, noting that “ At the European level, Italy can support solutions that address these risks while preserving the benefits of global integration and multilateralism.” At the national level, “Italy can strengthen its resilience to fragmentation by improving efficiency and productivity, identifying specific products at risk of fragmentation and developing strategies to deal with potential disruptions”. The IMF adds that “accelerating the green transition would strengthen energy security”.

Reforms Pnr

The reforms of the Pnrr, the Fund emphasizes, “are aimed at filling many shortcomings hampering productivity and must be fully and swiftly implemented. Strengthening the administrative and executive capacity of local authorities would ensure efficient management of the large number promoting projects and measures to speed up procedures should promote competition and the integrity of financial resources”.

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Source: Corriere

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