In a parliamentary hearing Andrea BrandoliniDeputy Head, Department of Economics and Statistics Bank of Italyexpressed a critical assessment of Strategy 2025 recommended by the government. According to the expert, the document risks exacerbating financial instability. The introduction of new tax deductions, but also a reduction in the Irpef bracket, will increase the risk. For the Bank of Italy, such a move posed risks. Emphasize social inequality and increased economic vulnerability of key segments of the population.
The Bank of Italy has criticized the move.
Bank of Italy Expressed concern about the government’s fiscal strategy, believing that the 2025 budget could create an imbalance in the management of state resources. in particular, Andrea BrandoliniThe Deputy Head of the Department of Economics and Statistics emphasized at the hearing how “expenditure increases without adequate compensation can lead to significant increases in net debt”.
According to estimates provided by the Bank of Italy, the fiscal impact of the tactic is far-reaching: loans are expected to increase by 8.9 billion euros for 2025, 15 billion for 2026 and 25.2 billion by 2027. Brandolini warned of this necessity. to maintain the fiscal stability of the country, considering the “absence of a solid fiscal base for such measures; Impediment to financial stability Long term.”
What impact could the new tax cuts have?
One of Bankitalia’s main points of criticism concerns the tax cuts introduced by the budget, particularly Irpef bracket And Cutting the tax wedge for employees. Interventions designed to lighten the tax burden on lower-middle income groups, however, can have consequences. Complicated. According to Brandolini, “Irpef deficiency and tax wedge a A revenue loss of around 18 billion euros per year”, a figure who, in his opinion, weighs too much on the state coffers.
They also point out that “without adequate structural coverage, these losses may force the government to make further cuts in other sectors”, such as health care or social security.
The Bank of Italy has also expressed doubts about this.Redistributive effect of new deductions. The institute believes that a reduction in the tax bracket for employees, along with revisions to deductions for family dependents, could have a negative impact on income redistribution. “In an economic context marked by high inflation and wage stagnation – Brandolini said – these measures risk further limiting the spending capacity of low-income families”.
According to the Bank of Italy, therefore, trickery Does not sufficiently consider the social impact of cuts. These measures, if not balanced by adequate social support, risk Widen the economic gap between different segments of the population and to create a less fair and sustainable tax system.
Long-term stability risks
Finally, the Bank of Italy expressed concern about the sustainability of these choices for long-term financial stability. According to the institute, the current approach to maneuver can be made by Italy. Greater vulnerability to economic shocks “Increasing debt, coupled with reduced revenue, may actually force the state to manage resources more restrictively in the future,” Brandolini further explained. If cuts and tax cuts are not supported by sustainable compensation measures, he added, “the risk is that public spending will fall and debt will rise”.
This is why Bankitalia is. Dissatisfied The budget, which should be reconsidered in the context of long-term sustainability, supports budgetary measures that guarantee maximum revenue stability.
