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REDMAGIC 11S Pro: gaming smartphone with overclocked chip
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Pil, debt, and excise duties: IMF triple rejection for Italy
The growth doesn’t restart, the debt remains high, and even measures like the cut in excise duties to address the energy shock are criticized. The International Monetary Fund (IMF) tears apart the Italian economy, highlighting the country’s critical situation and also targeting some of the government’s choices.
The first element concerns growth, which continues “at a moderate pace, weighed down by external factors and structural challenges.” Therefore, the blame is not only due to global tensions but also to Italian structural problems that are not addressed.
Growth doesn’t restart and the debt remains high: the IMF’s alarm
Let’s start with the growth data. Real GDP increased by only 0.5% last year, according to the Fund, and the situation is unlikely to improve with the impact of the war and the energy shock. Limited growth of 0.5% is expected for this and the next year, according to the analysis by the International Monetary Fund.
Despite the “fiscal consolidation” implemented in recent years, “the public debt remains too high,” the IMF notes. And even the drop in the deficit to 3.1% of GDP last year is not enough, because “despite these results, the public debt has increased to around 137% of GDP by the end of 2025 and the debt dynamic remains vulnerable to growth shocks, interest rates, and confidence.”
In addition to current contingencies, there are also structural issues to assess. Starting with the rapid aging of the population and the persistent weakness of productivity growth, elements that will continue to limit potential growth around 0.6% according to this analysis, also due to a lower workforce participation rate compared to similar countries, especially for women and young people.
This should be added to, indeed, the global uncertainties that lead to considering growth risks “downward.” The rise in energy prices has weakened consumer confidence and increased the probability of GDP growth below previous forecasts. Furthermore, a prolonged conflict in the Middle East could lead to a new increase in prices, exacerbating financial conditions and further weakening confidence and consequently economic activity.
The Failure of the Excise Cut
There is another warning issued by the IMF, which concerns the generalized reduction in excise duties on gasoline and diesel, introduced to reduce the impact of the oil shock. But according to the Fund, this measure “should be replaced by targeted monetary transfers to the most vulnerable families.” In the opinion of the international organization, “measures to mitigate the impact of rising energy prices should be neutral with respect to the budget, temporary, well-targeted, and not dampen the incentive to reduce energy consumption.”
There are also other requests from the IMF, such as the elimination of the flat tax on self-employment income and updating property values in the land registry. Conversely, the government’s decision to cancel early retirement benefits is promoted, a government decision that contradicts years and years of election campaigns.
The article Pil, debt and excise duties: from the IMF triple rejection for Italy
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https://www.lanotiziagiornale.it/pil-debito-e-accise-dal-fmi-tripla-bocciatura-per-litalia/