The Italian economy will return to pre-Covid levels in the first half of 2022. This is predicted by the OECD in the Economic Survey on our country. After -8,9% recorded in 2020, research estimates that in 2021 GDP will grow by 5,9%, while public debt will reach almost 160% of gross domestic product.
GROWTH
"We aim for post-Covid growth that is higher" than that achieved "before the crisis linked to the pandemic", said the Minister of Economy, Daniele Franco, during the press conference to present the report. "We must stop our long stagnation in the economic situation", underlining that the Government has put pen to paper "a challenging reform agenda both from an economic and a political point of view, with interventions ranging from taxation to competitiveness and labor policies as well as sectoral reforms”.
According to the Organization "significant fiscal support in 2021 will favor recovery in the short term, with the acceleration of vaccination rates and the easing of restrictions". Subsequently, "when the recovery is consolidated" it will be necessary to implement "a medium-term fiscal plan to reduce the ratio between public debt and GDP", advises the OECD. The Italian economy, reads the document - "is recovering from the crisis induced by the Covid-19 pandemic". “The government's generous support has mitigated job losses and adversity, and has also preserved productive capacity”, continues the Parisian body, adding that “the loan guarantees and debt repayment moratoriums have supported the corporate liquidity and limited bankruptcies. The short-time work schemes and ban on dismissal have been complemented by income support for those who do not benefit from existing safety nets, together with the postponement of tax payment dates. School attendance and educational outcomes are worsened for the most disadvantaged individuals; on the other hand, the social isolation due to the lockdown has been associated with an increase in domestic violence”.
Optimism also about the future, when "public investments, including those financed by Next Generation EU funds, combined with greater confidence and higher levels of demand, will support investments in the private sector". In this context, the OECD therefore defines public finance reforms as “necessary” and recommends “improving the composition of public expenditure in order to promote growth and job creation. Improve coordination between agencies in charge of implementing public investment projects in order to increase disbursement levels. Compact the public procurement procedures currently entrusted to many small agencies and concentrate them in a smaller number of entities with greater capacity”.
CITIZENSHIP INCOME AND FEE 100
The report also discusses some of the hot topics on the current political agenda. According to the OECD, basic income has "contributed to reducing the level of poverty of the poorest sections of the population" and although poverty levels have increased due to the pandemic, "in 2020 public transfers limited the decrease in income available of households to 2,6% in real terms”.
On pensions, the OECD instead recommends containing spending "by letting the early retirement scheme ("Quota100") and the so-called "Women's Option" expire in December 2021, and immediately re-establish the correlation between retirement age and hope". “The pressures on spending linked to demographic aging and interest rates – continues the international body – are high and destined to increase in the long term”.
DIGITIZATION
To support the recovery, it is necessary to focus above all on digital, a sector in which Italy appears to be in difficulty. In detail, our country "boasts a low level of digital literacy and the adoption of digital services compared to the rest of the OECD countries", reads the study. To date, only 44% of citizens aged between 16 and 74 “have basic digital skills compared to the EU average of 57%, while “the entire public administration appears to lack personnel equipped with the necessary skills. Finally, it is "necessary to support a more rapid diffusion of fast broadband, which is currently very limited".
