Italy: 2021 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Italy
IMF Staff Country Reports, June 2, 2021
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- Italy: 2021 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Italy
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Bibliographic details
- Published: June 2, 2021
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781513573083.002
Pandemic impact on the economy
- GDP fell by nearly 9 percent in 2020, with much larger drops for contact-intensive services.
- Public and corporate debt increased strongly and preexisting vulnerabilities have likely worsened.
- The pandemic dealt a severe blow to the Italian people and their economy.
Government priorities and policy response
- The government is prioritizing:
- resolving the health emergency;
- transforming the economy to lift productivity;
- improving social outcomes;
- strengthening resilience to future shocks and structural change.
- The large National Recovery and Resilience Plan—partly financed by sizable Next Generation EU resources—will be used to increase physical and social infrastructure.
Outlook and risks
- GDP is expected to recover strongly in 2021–22 and to grow well-above trend over the medium term, supported by investment spending.
- Economic scarring could be sizable.
- Two-sided risks relate to:
- how the pandemic progresses;
- the efficiency of investment spending;
- the extent of savings drawdown.
- Large costs are associated with the downside risk scenario.
Subjects and keywords
- Subject: COVID-19, Financial institutions, Fiscal policy, Fiscal stance, Health, Income, International organization, Loans, Monetary policy, National accounts, Public debt
- Keywords: balance sheet repair, banks' capitalization, COVID-19, Europe, Fiscal stance, Global, government support, Income, liability positions vis-à-vis nonresident, Loans, money market rate
International Monetary Fund. Italy: 2021 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Italy (IMF Staff Country Reports 2021, 101).
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