The Italian GDP will grow by 1% in 2019 and 1,2% in 2020, but at the same time the deficit-GDP ratio risks approaching or even exceeding the 3% limit. These are the forecasts released by the study center on Tuesday 23 October REF Searches, which clearly contradicts the government's estimates. In fact, the Executive speaks of a growth of 1,5% for next year and 1,6% for the next.
In a recent interview with FIRSTonline, Luca Paolazzi, former director of the Confindustria Study Center and now partner of REF Ricerche, had defined the government's numbers as "pure utopia".
Now the Milanese study center increases the dose, emphasizing that "the Italian position is peculiar in the European panorama", because "the signs of deceleration that have emerged since the first months of the current year and linked above all to the less favorable international situation (drop in exports in the presence of still weak domestic consumption), financial tensions were added, with the widening of the spread and the heavy losses of the stock market indices. If the situation on the markets does not normalize in the short term, the real effects expected from the Government's expansive budget policy will be canceled".
The tables published today also contradict the government on two other fronts: in the next two years, in fact, neither the unemployment rate (10,8% in 2019 and 10,7% in 2020) nor the debt-to-GDP ratio (130,7% next year and 131,3% the next).
According to REF Ricerche, various interventions envisaged by the yellow-green maneuver - above all the basic income and additional public investments – will be made only partially the first year. As a result, "budgetary growth stimuli" will occur gradually and perhaps even the 2019 deficit will be lower than the Government's forecasts.
"However, the picture of the public finances in the following years is more difficult - continues the study center - The Government anticipates a decreasing trend of the deficit, but incorporating another VAT safeguard clause. It is a measure which, however, it is not obvious that it will be adopted; however, it appears objectively difficult to identify alternative interventions in terms of spending cuts. On the other hand, it is contradictory to set growth objectives produced in the first year by higher public deficits and then accompanied by lower deficits".
At the same time, "it is not even easy to follow the hypothesis of a deactivation of the deficit clauses - writes REF Ricerche - this happened in recent years, but it is one thing to revise a balanced balance target, another thing is to revise upwards deficit targets as early as 2 percent. In short, the risks are that the picture of the public finances slides towards balances close to or above 3%. It is no coincidence that the markets have reacted badly to the Government's proposals. The financial tensions are mounting and the risk that emerges is that of a screw-up, which passes through the losses recorded by the bank quotations and a possible reduction in the supply of credit to the system”.
Finally, a political forecast: “It cannot be excluded that the structure of the maneuver could undergo some adjustments in the coming weeks. A phase of increased tensions on the markets does not seem useful, even from the point of view of the government's political objectives: if it is true that the clash with the European authorities can play a role in justifying the only partial implementation of the announced programs, it is also true that a spiral into a recession does not help, especially if the objective is to achieve the European elections in May next".
