“It is clear that the war has caused a worsening growth prospects. In particular, this is affected by the increase in the prices of energy and other goods, but also by consumer confidence which has decreased. Consumers and businesses see a less positive future today. We will do whatever is necessary to help families and businesses within the European framework”. Prime Minister Mario Draghi said this at the press conference after the unanimous go-ahead from the Council of Ministers at Def 2022 which defines the economic and financial framework for the next three years. This document will then become the Italian stability program at the end of April which will be sent to the European Commission.
A Def approved in advance and which had to revise the estimates and numbers based on a war that had not been foreseen. The growth from 4,7 drops to 3,1%, but the data that must be taken into consideration is a completely unknown one: the uncertainty and the impossibility of predicting what the evolution of the war in Ukraine will be and the possible progression Of new sanctions which may be applied in the coming weeks, and perhaps in the coming months, and which will therefore affect all economic data.
At the moment there is a drop, but it is a drop that is still considered contained, with the situation still under control, so much so that there will be no budget variance. In 2022 the deficit made available a ceiling of 9,5 billion euros of resources (4,5 billion have already been spent on aid and support) and another 5 will be allocated in the coming weeks to support both families and businesses. “The willingness of the government is there and it is total. We are very aware of the social unease, especially for those who fear the impact of inflation and we are ready to intervene. We have already done it in the recent past, 15,5 billion have been allocated. In the coming weeks we will better understand the dimensions of the necessary intervention and how to finance it”, concluded the Prime Minister during the press conference.
Def 2022: GDP growth retreats, debt reduction continues
The war in Ukraine sinks the growth of GDP, which this year will stop at 3,1% thanks to government measures. The first quarter will close with a contraction of 0,5% despite the good performance of industrial production in February and the second quarter, which should see a moderate recovery, is weighed down by significant "downside risks". The new forecasts in the Economic and Financial Document that has just been approved give off a cautious optimism given the geopolitical situation.
Inflation, on the other hand, is bad, for which the government expects "a surge". In the face of the inflationary rise, however, "a more moderate acceleration of wages and income from work" is expected. However, the decisions of the central banks on monetary policy will depend on this.
As regards the debt it will continue its path of reduction in the coming years: in the programmatic scenario indicated in the Def 2022, the debt is revised slightly upwards in 2021, to 150,8%, due to the revision of the nominal GDP carried out by Istat. For this year it is expected to drop by 4 points, to 146,8%, to drop to 145% in 2023, 143,2% in 2024 and 141,2% in 2025.
Def 2022: the impact of Russian gas and oil on Italian GDP
If Russia cuts off oil and gas supplies between now and the end of 2023, energy prices would rise, impacting GDP by 0,8 percentage points in 2022 and 1,1 percentage points in 2023. Employment would fall by 0,6 points this year and 0,7 in 2023. In a worst-case scenario, i.e. if there were a Russian stop to energy and Italy were unable to diversify supplies as planned, also considering "the share of gas consumption to be rationed ”, the impact on GDP would be 2,3 points in 2022 and 1,9 in 2023. Employment would be lower by 1,3 points this year and 1,2 in 2023.
New aid for 5 billion, fuel excise cut and car incentives
Around 9,5 billion euros will be available for the new interventions, without the need for a budget variance, despite the pressure from the majority parties. As underlined by Minister Franco, the government has set the trend deficit to 5,1% and confirmed the public finance objectives of the Nadef of 5,6%. The difference between the two numbers, i.e. 0,5 percentage points, represents the room for maneuver allowed without having to request extra debt, which amounts to 9,5 billion.
The new decree law "will first of all restore the temporarily definanced budget funds to partially cover the decree law 17 of 2022, equal to 4,5 billion in terms of impact on the public administration account", reads the document. The remaining treasury consisting of 5 billion will be allocated "to four types of interventions: to contain fuel prices and the cost of energy, the increase in resources necessary to cover the increase in the prices of public works, the increase in funds for credit guarantees, further measures that may be necessary to assist Ukrainian refugees and to alleviate the economic impact of the ongoing conflict in Ukraine on Italian companies”. The impact on GDP of the measures that will be adopted in April is estimated at 0,2 percentage points of GDP in 2022 and 0,1 in 2023. Consequently, the GDP growth rate envisaged in the programmatic framework is equal to 3,1. 2022% in 2,4 and 2023% in XNUMX, while growth forecasts for the following two years remain unchanged to one decimal.
The reduction of 10 cents of theexcise duty on petrol and diesel using the VAT surplus. Therefore the abatement of the excise duty is extended until 2 May.
Green light also to incentives for the purchase of electric cars and motorbikes, hybrid and low emission. The provision, which will enter into force only the day after its publication in the Official Gazette, provides for 650 million a year for three years, until 2024.
