The latest review of the costs of the superbonus in Italy has raised new concerns about the impact on deficit of 2023, now expected at 7.4%the highest in Europe according to Eurostat.
This increase could bring Italy closer to an infringement procedure by the European Union, further complicating the national economic situation.
The Minister of Economy, Giancarlo Giorgetti, tried to reassure, underlining that the planned measures are manageable, despite global uncertainties persisting. However, the opposition criticizes the government's management, highlighting a situation of apparent disorder.
The issue is complicated by the financing needs of other vital sectors, such as healthcare, in a context of growing public debt.
The weight of the Superbonus on the accounts
Initially estimated at 5.3% in last autumn's Nadef, the deficit was subsequently revised to 7.2% in March, to reach the current 7.4%.
This increase is mainly attributed to the onerous costs of the Superbonus, which reached 77 billion euros for 2023 alone, well five times the figure originally estimated.
This situation has highlighted the difficulty of balancing economic stimuli and fiscal sustainability, with Sergio Nicoletti Altimari of Bank of Italy which warns against further extensions of social security contributions, which could increase uncertainty over Italian public finances.
The political reactions to the latest deficit update were obviously immediate and strong. Luigi Marattin of Italia Viva described the government as “in disarray”, citing Istat which contradicts government forecasts.
In response, the Minister Giorgettiduring a hearing with the joint budget committees, admitted that global geopolitical uncertainties show no signs of abating, but reassured that the update of the DEF's programmatic framework will be presented in a plan by the summer, in line with the new rules of European economic governance.
Budget Considerations
As the government seeks to mitigate the impact of the 110% Superbonus and other fiscal measures, the need to manage public debt becomes increasingly imperative.
The Parliamentary Budget Office highlights the likelihood of the EU launching an excessive deficit procedure, due to the continued exceeding of the 3% threshold in the deficit-to-GDP ratio.
At the same time, the three-year period 2025-27 presents significant challenges, with forecasts of a deficit consistently above 3%. The Court of Auditors has highlighted the need to reduce debt, which could be lowered through privatizations, although current estimates remain below expectations.
