“The peak of the crisis has passed”, now the goal is to return to strong and sustainable growth. The Bank for International Settlements writes it in its annual report, emphasizing that recovery can only take the path of rigor in public finances and structural reforms. Other than loosening the grip: according to the BIS "governments must redouble their efforts on public finances".
Furthermore, the institute explicitly urges central banks to move towards the study of appropriate exit strategies from the anti-crisis measures implemented in past years, since they cannot restore the balance sheets of households and financial institutions, they cannot guarantee the sustainability of public finances and above all, they cannot implement the structural reforms necessary to bring the economies back on the path of real growth.
According to the BIS, “postponing the moment of the inevitable exit from these” accommodating “policies places central banks in front of growing challenges. Monetary authorities must once again place the emphasis on their traditional stability-oriented approach, but giving greater prominence to financial stability considerations and the international repercussions of monetary policies”.
Central banks “will have to carefully weigh the risks of premature exit against the risks of further deferment. While the former are well known, it is important not to underestimate the latter for the mere fact that they have not materialized yet”.
Lastly, the annual report shows that Italy is among the countries with the least need to correct public finances between now and 2040, taking into account the expenses linked to the aging of the population. Italy needs a correction of 4 percentage points of GDP, the third lowest figure among advanced countries after Sweden (1,3 points) and Germany (3,4 points). France needs to correct the accounts by 5,4 points of GDP, continues the BIS, Spain by 10,4 points, Great Britain by 13,2 points and the USA by 14,1 points. Black shirt for Japan, who will need a 14,9-point correction. Furthermore, according to the forecasts contained in the report, Italy's budget deficit will settle at 3% of GDP in 2013, while public debt will peak at 144% of GDP.
