Italy: Watch that deficit

GDP slowed in the first half of 2007, as export growth weakened, rebounded in the third quarter but may weaken again in the fourth. Growth over the course of 2008-09 is projected at near its potential rate of just under 1.5%. Unemployment, which continued to fall through the first half of 2007, should decline further, but at a slower rate. The recent pickup in price inflation may persist into 2008 and 2009.
A promising improvement in the underlying fiscal situation seen in 2006 and throughout most of 2007 has been slowed in the revised 2007 budget and that for 2008. The upward revision in spending plans is not the best response to unanticipated and possibly temporary buoyancy in revenues. Tax rates are already quite high, the overall debt level is the second highest in the OECD and increases in age-related spending are on the horizon, even though pension reform, provided it is fully followed through, has put Italy in a situation that seems better than in many countries. The government needs to convince public opinion that its plans to reduce the deficit and debt must be maintained and, preferably, strengthened.

©OECD Observer No. 264/265, December/January 2008

OECD Economic Outlook No. 82, December 2007 - Preliminary version
All OECD Observer articles on Italy

Economic data

GDP growth: -9.8% Q2/Q1 2020 2020
Consumer price inflation: 1.3% Sep 2020 annual
Trade (G20): -17.7% exp, -16.7% imp, Q2/Q1 2020
Unemployment: 7.3% Sep 2020
Last update: 10 Nov 2020

OECD Observer Newsletter

Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter :

Twitter feed

Digital Editions

Don't miss

Most Popular Articles

NOTE: All signed articles in the OECD Observer express the opinions of the authors
and do not necessarily represent the official views of OECD member countries.

All rights reserved. OECD 2020