Italy: Toward a Growth-Friendly Fiscal Reform

39 Pages Posted: 5 Apr 2018

See all articles by Michal Andrle

Michal Andrle

International Monetary Fund (IMF)

Shafik Hebous

International Monetary Fund

Alvar Kangur

International Monetary Fund (IMF)

Mehdi Raissi

International Monetary Fund (IMF) - Asia and Pacific Department

Date Written: March 2018

Abstract

Published in late 2017, the Italian medium-term fiscal plan aims to achieve structural balanceby 2020, although concrete, high-quality measures to meet the target are yet to be specified.This paper seeks to contribute to the discussion by (i) assessing spending patterns to identifyareas for savings; (ii) evaluating the pension system; (iii) analyzing the scope for revenuerebalancing; and (iv) putting forward a package of spending cuts and tax rebalancing that isgrowth friendly and inclusive, could have limited near-term output costs, and would achievea notable reduction in public debt over the medium term. Such a package could help theauthorities balance the need to bring down public debt and, thus, reduce vulnerabilities whilesupporting the economic recovery.

Keywords: Europe, Italy, Growth-friendly fiscal policy, public pensions, dynamic stochastic general equilibrium models, Forecasting and Simulation, Social Security and Public Pensions, Italy

JEL Classification: E27, E62, H55

Suggested Citation

Andrle, Michal and Hebous, Shafik and Kangur, Alvar and Raissi, Mehdi, Italy: Toward a Growth-Friendly Fiscal Reform (March 2018). IMF Working Paper No. 18/59. Available at SSRN: https://ssrn.com/abstract=3157021

Michal Andrle (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Shafik Hebous

International Monetary Fund ( email )

Washington, DC
United States

Alvar Kangur

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Mehdi Raissi

International Monetary Fund (IMF) - Asia and Pacific Department ( email )

700 19th Street NW
Washington, DC 20431
United States

HOME PAGE: http://https://sites.google.com/site/mehdiraissi/

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