OECD Economic Surveys: Italy 2024
Italy has weathered recent crises well. A strong fiscal policy response, enhanced competitiveness and improved banking sector health have supported growth in recent years. But public debt is high and spending pressures are rising from population ageing, higher interest rates, and the green and digital transitions. A steady fiscal consolidation is needed over several years to put debt on a more prudent path. Growth in spending needs to be contained, but public investment in the National Recovery and Resilience Plan should be protected to minimise adverse effects on growth. The ongoing civil justice and public administration reforms will support growth by raising business investment and facilitating the implementation of public investment plans. Regulatory barriers to competition in services should be reduced. Raising employment, including by expanding access to early childhood education to reduce barriers to female labour market participation, would make growth more inclusive. Additional policy efforts are needed to accelerate the reduction of greenhouse gas emissions and adapt to climate change. Renewable power generation has advanced, but complex permitting procedures that hold back the installation of renewable energy capacity need to be simplified.
SPECIAL FEATURE: Achieving the energy and climate transition
Also available in: Italian
Key policy insights
The Italian economy has weathered recent crises well, but growth is now slowing amid tightening financial conditions. Public debt is among the highest in the OECD, limiting the space for continued fiscal policy support. With substantial fiscal pressures related to population ageing, debt servicing costs and the climate transition on the horizon, tax and spending reforms are needed to put public debt on a more prudent path. The ambitious package of structural reforms and public investment in the National Recovery and Resilience Plan is a major opportunity to reinvigorate growth and make fiscal pressures more manageable. This will require consolidating and expanding major recent reforms in the areas of civil justice, public administration and competition; equipping the workforce with the skills needed to succeed in the digital and green transitions; and raising labour market participation, especially of women.
Also available in: Italian
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