"The maneuvering spaces are tighter than in the past and will therefore be necessary careful monitoring to evaluate the evolution of the macroeconomic and public finance scenario during construction”. He said it today Lilia Cavallari, president ofParliamentary Budget Office (Upb), during a hearing on Nadef before the special commissions of the House and the Senate. Cavallari added that the double commitment undertaken by the government to bring the deficit back to 3 per cent of GDP in 2025 (also thanks to the return to primary surpluses, equal to 0,2 per cent of GDP in 2024) should be assessed positively and to 1,1 in the following year) and to reduce the ratio of public debt to GDP”. The PBO validated the trend and programmatic macroeconomic framework contained in the new Nadef, which updates and integrates the Note launched at the end of September by the Draghi government.
Pnrr, Upb: "Crucial implementation, no to new reprogramming"
"The dynamics of the GDP estimated in the two-year period 2024-25 is more sustained than that recorded by the Italian economy in the pre-crisis period - Cavallari said - and this depends crucially on the spending impulse and the reform action attributable to the Pnrr . The timing and effectiveness of these interventions therefore represent a key factor in supporting the macroeconomic framework in the medium term. It is necessary to prevent the expenditure profile of the Pnrr from being further reprogrammed, with negative consequences on the growth path of the economy indicated in the Nadef. In this sense, the realization, in particular, of the expected growth for investments in 2023 (34,7 per cent) will require an extraordinary effort on the part of all the implementing bodies".
The president of the PBO then reiterated that “the growth forecasts for the entire period are based on a significant expansionary contribution from budgetary policy through full compliance with the timing of implementation of the infrastructural interventions envisaged by the Pnrr. However, this requires one more strengthening administrative capacity and more decisive simplification of the authorization processes. Furthermore, in order to comply with the new expenditure schedules, the implementation of the interventions will have to be guaranteed in the face of higher energy costs and increases in the price of building materials. Delays in the implementation of the Plan can therefore represent a significant element of risk".
Upb: "Macroeconomic scenario subject to downside risks"
The macroeconomic scenario of the Italian economy “appears subject to risks of various kinds – Cavallari continued – above all of an international nature. Favorable scenarios cannot be excluded, but in the judgments of the PBO panel the adverse ones definitely prevail, so the risks are overall oriented to the downside”. Among these, the Upb lists "the war in Ukraine and the gas market crisis", which "certainly represents the greatest risk, on all forecast horizons"; the evolution of the pandemic; the "value chains and the Pnrr", given that "the very strong increases in energy costs and the shortage of some materials could affect the hypothesis of the integral, timely and efficient implementation of the investment projects of the Pnrr". And then inflation: “The risks on prices, concentrated in the two-year period 2022-23, mainly depend on the assumptions on exogenous variables, which for the prices of raw materials are based on futures markets, characterized by strong volatility in this phase. The return of nominal dynamics from next year therefore appears to be weighed down by a very broad uncertainty and the possibility of still rapidly growing price scenarios cannot be ignored”, concluded Cavallari.
Read the complete text of the Upb hearing.
