Italy 2019

Basic statistics of Italy
Executive summary
Key policy insights
	Growth has stalled amid persistent economic and social challenges
		Growth has stalled
		Expansionary fiscal policy and low growth increase the risks from high public debt
		Growth will remain weak in the next two years
	Banks’ health has improved but is exposed to risks around the public finances
	Improving well-being and boosting growth requires credible fiscal policies and ambitious structural reforms
		High government debt is a source of risks and limits fiscal policy choices
		Structural reforms are needed to strengthen social inclusion and boost growth
		Protecting the environment
		Boosting job creation
		Enhancing entrepreneurship and helping small and innovative firms to grow
		Improving the quality of public investment and infrastructure management
			Enhancing infrastructure governance and strategic planning
			Enhancing transport and improving accessibility
			Improving central-subnational fiscal relations to boost subnational investment
		Improving the tax system
	References
Annex. Progress in structural reform
Thematic chapter
	Chapter 1.  Tackling Italy’s social and regional divide
		Italy’s large disparities in income and well-being follow regional lines
		Italy’s tax and benefit system can do more to support employment and to lower poverty
			Italy’s tax and benefit system discourages work
				The benefit system inadequately addresses poverty and social disparities among the young and the working age population
					Italy’s pension spending is high and new policies will raise it further
				Reforming tax and benefit policies to better fight poverty, encourage employment and improve inclusiveness
					The REI introduced a national guaranteed minimum income to Italy
					The Citizen’s Income raises support for low incomes but risks weakening incentives to work
					Flattening personal tax rates would benefit high-income households and involve high costs
					In-work benefits, a guaranteed minimum income and personal tax income reforms would boost employment and raise poor households’ income
			Reforming social policies to support inclusiveness, productivity and growth
				Strengthening employment services
				Improving skills and training to support employment and formalisation
				Lowering labour market informality and precarious employment
				Greater access to quality childcare would strengthen work incentives and improve wellbeing
		Making regional development policy more effective to boost economic dynamism
			Policies have failed to narrow the long-standing and large regional divide
			Local public administrations are key to effective regional policies
				Harnessing agglomeration economies to promote regional development
			Funding sub-national governments according to needs and capacity
		References