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Italy’s Public Debt to Increase to 139.8% of GDP by 2027 Due to Construction Bonuses: Report


by Gianni Trovati

In the Def tables the new data on the cash impact: 38.3 billion this year, then other increases. Decline to 25.4 billion in 2027

3′ reading

For this year the bill speaks of 38.298 billion. In 2025 it rises to 39,799, declines a little to 38,627 billion the following year to fall to 25,445 billion in 2027. These numbers contain the updated impact of the construction bonuses on the public accounts: based on figures that are decidedly larger than those, already important, hypothesized by the Ministry of Economy in previous episodes of the tax credit soap opera. Without this load, for example, this year the debt/GDP would have fallen by 1.3 percentage points instead of increasing by 0.5 points.

The data is not very evident, written as it is in the row of a table on page 72 of section II of the Def, the one dedicated to “analyses and trends in public finance”. But once identified it is quite clear.

The calculation shows the impact on the cash flow, therefore on the requirement and consequently on the public debt, of the “capital transfers to families”. The item is almost entirely absorbed by the tax bonuses for construction, and therefore first of all by the 110% which alone covers approximately three quarters of the abundant 200 billion spent in this area in the last three years.

Before the era of super-concessions, in fact, these transfers to families were an almost negligible component of public accounts, known only to a limited circle of professionals: in the 2022 Def for example, written shortly before the 110% tsunami began to emerge, the figure was calmly traveling just above a billion per year, amidst general indifference. In the short space of two years this box of the consolidated cash account of the Public Administration has grown 20 times. And he deservedly earned the limelight.

The underlying causes are now known even to many who have done everything not to see them, and arise from the tax credit mechanism which in the years following the birth reduce state revenue, thus increasing the cash requirement to be covered. with the issuance of public debt, with a dynamic on which there is no Istat or Eurostat accounting criterion that can do anything. With the non-negligible side effect, among other things, of making the weight of the debt felt in the years in which the growth drive (much discussed in its dimensions) determined by subsidized jobs has already run out.

The issue came to the (floating) attention of Parliament on 23 May last year, when the Treasury, General Accounting and Finance Department of the Mef appeared together at a hearing at the Finance Committee of the Chamber presenting a table in which an impact of the bonuses was estimated construction on the average annual requirement of 23.4 billion in 2024-26.

The data updated the average 17.4 billion indicated by the Def. But the story, as the following months showed, was far from over, and it didn’t take long to reach the average 39.1 billion now calculated, with an increase of 2.2 times compared to 12 months ago. And with an important impact also on 2027 so as not to leave even the last part of the legislature free. Last May, moreover, official estimates indicated the cost of a Superbonus at 67.12 billion, which has now skyrocketed above 150 billion.

This explains the push that in the new Def leads the public debt to constantly rise from 137.3% of GDP in 2023 to 139.8% estimated for 2027, before the modest change of sign scheduled for 2028; in a surge that occurs while the deficit is falling and the accounts even indicate a primary balance of 2.2 points of GDP (abundant 52 billion) in 2027. A result that can only be achieved on the condition that there is no more deficit in the next four euros years.

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2024-04-13 17:52:56
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