Just days after announcing the first recession this century, Italy has released its long awaited Economic and Financial Document (DEF) for 2024, a declaration of the country’s economic and fiscal strategies ahead of the year. This report, submitted to Parliament as required by law, is the main reference in terms of financial planning Italy, and it offers a key indicator on the country’s economic perspective and the main policy targets.
At a crossroads in what is a complex set of challenges for the Italian economy, domestically and internationally, the DEF 2024 arrives. This document indicates that the government has endeavoured to strike the balance between fiscal prudence and economic dynamism while dealing with important social problems. This lays out medium term public finance and economic strategies, building on shifting economic global landscape and Italy’s commitments within the European Union.
The government’s attitude towards running public finances is something one of the most important focuses of the DEF 2024. The document sets out added fiscal sustainability measures and headspace to make investment oriented initiatives providing growth. Government has stressed a framework which balances spending reviews with targeted revenue measures to achieve a gradual and sustainable reduction of the debt to GDP ratio.
And the document also explores the current challenges in the labour market, suggesting ways of raising employment and productivity. Regarding employment, unemployment rates remain above pre pandemic levels, and especially high in youth and southern regions, the DEF 2024 sets targets and proposes instruments to improve the job creation and skills matching between those who want to work and jobs available. The investments cover vocational training and support for entrepreneurship and innovation.
The DEF 2024 is rooted in climate change and the green transition, which are being debated in recent years so that Italy meets its environmental goals and is consistent with the European Green Deal. All of these plans include substantial investments into renewable energy, energy efficiency and sustainable infrastructure and form the backbone of future economic growth and job creation.
The issue of demographic change is dealt with by the DEF 2024 too, for the economic consequences of the ageing Italian population. It presents proposals to back families, start births rates and improve pension system’s sustainability. Demographic challenges are entwined with broader economic objectives: They affect labour force participation, productivity and public spending behaviours.
The document reaffirms Italy’s firm commitment to implementing such reforms and investments as set out in its National Recovery and Resilience Plan (NRRP), and funded by EU funds. The successful execution of the NRRP is considered key to improving Italy’s medium-to-long term growth potential and fixing its structural weaknesses in the economy.
In the DEF 2024, the international context is key to the document since it takes into account the uncertainties root in geopolitical tensions, trade dynamics and global economics. As Italy prepares to take up the presidency of the G7 in 2024, international economic cooperation and the development of solutions to common challenges including climate change, digital transformation and inclusive growth represent an opportunity to shape the global common good.
Def 2024 is the roadmap for policymakers and a signal to the international business and investors Italy is starting its economic recovery and transformation. As Italy attempts to bring sustainable growth and boost competitiveness on the world stage, the months ahead will be closely watched to observe how the document is implemented and the government conditions itself to new economic circumstances.
