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Italy: Toward a Growth-Friendly Fiscal Reform
Author:
Michal Andrle null

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,
Mr. Shafik Hebous
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Mr. Alvar Kangur
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Mr. Mehdi Raissi
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Series:
IMF Working Papers
Volume/Issue:
Volume 2018: Issue 059
Language:
English
Publication Date:
16 Mar 2018
DOI:
https://doi.org/10.5089/9781484347584.001
ISBN:
9781484347584
ISSN:
1018-5941
Pages:
38
Keywords:
WP; tax credit; internal rate of return; public spending; tax burden; Growth-friendly fiscal policy; public pensions; dynamic stochastic general equilibrium models; Italy; early retirement; low income; stability law; nominal wage; IP regime; retirement age; potential GDP; rationalizing tax expenditure; public education expenditure gap; local government; replacement rate; Pension spending; Pensions; Retirement; Tax allowances; Wages; Global
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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Published in late 2017, the Italian medium-term fiscal plan aims to achieve structural balance by 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 identify areas for savings; (ii) evaluating the pension system; (iii) analyzing the scope for revenue rebalancing; and (iv) putting forward a package of spending cuts and tax rebalancing that is growth friendly and inclusive, could have limited near-term output costs, and would achieve a notable reduction in public debt over the medium term. Such a package could help the authorities balance the need to bring down public debt and, thus, reduce vulnerabilities while supporting the economic recovery.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund