The effects of the Superbonus: public deficit at 7.2%


Emma Potter

The escalation of costs associated with the Superbonus has raised serious concerns for Italian public finances, highlighting an unexpected and significant overshoot of spending forecasts.

The phenomenon, accentuated by a race to exploit the advantageous conditions offered by the bonus, raises critical questions about sustainability of public debt and on the ability to manage the long-term implications of incentivized policies without adequate controls.

This analysis explores the dynamics that led to this situation, examining the political decisions, administrative tensions and macroeconomic effects with the aim of better understanding the challenges that the Italian government will face in the near future.

The race for the Superbonus: an unexpected phenomenon

The end of 2023 witnessed an unprecedented phenomenon: a frantic rush for the Superbonus. Italian families, anticipating a reduction in tax benefits – from the initial 110% to gradual decreases up to 70% expected for 2024 – have accelerated their requests to access the advantageous conditions of the Superbonus.

Although the initial estimates had already been revised upwards during the year, the final Istat data revealed that the deficit generated by this initiative was significantly greater, contributing substantially to the increase in public deficit at 7.2% of GDP.

The NaDef had anticipated a deficit for the end of the year equal to 5.3% of GDP, significantly underestimating the effect of the Superbonus. Even before Christmas, it was assumed that the deficit could be greater than one percentage point of GDP, between 20 and 23 billion euros, due to the rush for tax credits for construction.

This estimate was then surpassed by Istat data, which showed an increase in the deficit to around 40 billion more than the 109.4 billion projected by NaDef.

The upward revision of the deficit was mainly fueled by the construction-related tax creditswhich also influenced the revision of the 2022 deficit and brought marginal improvements to the 2020 and 2021 data. The October NaDef included around 37 billion euros of Superbonuses, equal to 1.8% of GDP, a figure already higher than the 14 billion hypothesized in April.

However, the Istat final balance showed a deficit 1.9% higher than the NaDef target, bringing the cost of the Superbonus in 2023 to around 76 billion euros, well above the 54 billion of the previous year.

The government's position and political reactions

The Minister of Economy, Giancarlo Giorgetti, expressed concern about the surge in the deficit caused by the excessive use of the Superbonus, defining the situation as the effect of an “irresponsible season”. His words underline the perception of an unsustainable financial burden brought by the stimulus measures, which exceeded the already pessimistic expectations for 2023.

Giorgetti hopes that, with the conclusion of this phase, Italian public finance can move towards a path of greater sustainability starting from 2024.

These statements immediately triggered reactions in the Italian political landscape. On the one hand, the vice president of the Five starsMario Turco, defined the attack on the Superbonus as “ssimply ridiculous“, highlighting a clear division of opinion on the value and impact of the measure.

On the other, Ubaldo Pagano, group leader of the Democratic party in the Budget Committee of the Chamber, he ironically asked if “sooner or later we will hear from Giorgetti that even the defeat at Caporetto is the fault of the Superbonus“, emphasizing the tendency to politicize economic issues.

This polarization reflects the complexity of the debate on the Superbonus and, more generally, on economic stimulus policies. While supporters of the Superbonus highlight its contribution to reducing the debt/GDP ratio through expansionary policies, critics highlight the risks of long-term financial sustainability.