Italy: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Italy

International Monetary Fund

No 2024/240, IMF Staff Country Reports from International Monetary Fund

Abstract: The Article IV Consultation discusses that Italy’s economy has recovered well from the coronavirus disease and energy price shocks. Employment rose alongside real activity. Financial conditions have eased somewhat but remain tight. Growth is forecast to average around ¾ percent in 2024–2026 as continued ramp up in investment under the EU-financed National Recovery and Resilience Plan (NRRP) broadly offsets the drop in tax-credit financed residential investment. Frontloading adjustment would moderate risks from high public debt and make room for productivity-enhancing spending, aging costs, and absorbing potential shocks. In order to raise productivity, full and timely NRRP execution, with a follow up plan of critical public infrastructure investments, education reform, and improving the business climate are needed. Deeper capital markets would facilitate private investment while industrial policy should be used selectively to correct market failures. Improving the compatibility of work and family life is needed to raise the birth rate and the share of working women.

Keywords: consultation discussion; currency of Italy; policy scenario; government securities market; budget decision; Tax allowances; Loans; Global; North Africa (search for similar items in EconPapers)
Pages: 88
Date: 2024-07-23
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