2021 OECD ECONOMIC SURVEY OF ITALY - Laying the foundations for a stronger recovery - Aran
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
2021 OECD ECONOMIC SURVEY
OF ITALY
Laying the foundations for
a stronger recovery
Rome, September, 6th 2021
@OECDeconomy @OECD
http://www.oecd.org/eco/surveys/economic-survey-italy.htm
Key Messages
Higher growth is needed to raise employment, improve living
standards and ensure healthy public finances.
Italy should:
• Provide targeted fiscal support until the recovery is well
underway
• Invest in green infrastructure and R&D and reform civil
justice and competition
• Improve the public sector's effectiveness by focusing on
performance, filling skill gaps and reviewing regulatory
barriers
2SUPPORTING THE ECONOMIC RECOVERY FROM
COVID-19
3The pandemic hit a poorly performing economy
Real GDP per capita
Index 2000 = 100
130
Italy France Spain European Union OECD
125
120
115
110
105
100
95
90
85
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
4
Source: OECD (2021), National Accounts (database).Regional divides are stark
60
North Centre South and islands
50
40
30
20
10
0
Employment rate Investment to GDP Share of households in relative poverty
Note: Employment rate is the share of employed in the population aged 15 and over in 2020; Investment share in GDP in 2018; The ISTAT
estimate of the relative poverty in 2020 is based on a poverty line (International Standard of Poverty Line - ISPL) defining as poor a household
of two components with a consumption expenditure level lower or equal to the mean per-capita consumption expenditure.
Source: ISTAT. 5COVID had a large effected on important sectors
Change in real output in 2020
A. Travel and tourism B. Manufacturing
% %
0 3
2
-10
1
-20
0
-30 -1
-40 -2
-3
-50
-4
-60 -5
-70 -6
Source: World Travel and Tourism Council (2021), Travel and Tourism: Economic Impact 2021; OECD (2021), Quarterly National Accounts
6
(database).Job retention schemes were widely used, especially
early in the crisis
Percent of dependent employment
% Take up after second wave (December 2020) Take up in first wave (April / May 2020)
40
35
30
25
20
15
10
5
0
Czech Republic
Greece
Denmark
France
Italy
Turkey
Austria
Slovenia
Finland
Belgium
Lithuania
Germany
Spain
Korea
OECD
Norway
Portugal
Japan
United Kingdom
Switzerland
Short-time work, Short-time work,
Unrestricted Furlough
Note: Data are provisional. Short-time work - unrestricted: no significant limits on the reduction in working time; short-time
work - furlough: no partial reductions in working time allowed.
Source: OECD (2021), OECD Employment Outlook 2021, Chapter 2 “Job retention schemes during the COVID-19 crisis: 7
Promoting job retention while supporting job creation”The banking sector has strengthened
Regulatory tier 1 capital to risk-weighted assets
2020 Q4, or latest, %
25
2020 Q4 2007 Q4
20
15
10
5
0
Note: Unweighted OECD average of available countries. Due to data unavailability the OECD average excludes New
Zealand and Switzerland. 8
Source: IMF (2021), IMF Financial Soundness Indicators Database; and Bank of Italy.But non-performing loans remain high by international
standards
Share of gross non performing loans in gross total loans
% 2020 Q4 or latest, % 27
7
6
5
4
3
2
1
0
Note: Unweighted OECD average of available countries. Due to data unavailability the OECD average excludes New
Zealand and Switzerland. 9
Source: IMF (2021), IMF Financial Soundness Indicators Database; and Bank of Italy.Strong H1 2021 resulted in higher growth projections (annual growth rates, unless specified) 2019 2020 2021f 2022f Gross domestic product 0.3 -8.9 5.9 4.1 Private consumption 0.3 -10.7 4.7 4.5 Government consumption -0.8 1.6 0.9 -0.6 Gross fixed capital formation 1.1 -9.2 15.9 8.7 Exports of goods & services 1.9 -14.5 12.0 7.1 Imports of goods & services -0.5 -13.1 12.3 7.5 Unemployment rate (%)1 10.0 9.3 10.4 10.1 Consumer price index2 0.6 -0.1 1.5 1.3 Current account balance3 3.2 3.5 3.3 3.3 1 Based on provisional Istat data. 2 Harmonised Consumer Price Index. 3 % of GDP Source: OECD Economic outlook and provisional projections 10
Key recommendations for a stronger and more
resilient recovery in income and jobs
• Continue fiscal support until the recovery is well
underway and make it increasingly targeted
• Announce a medium-term fiscal plan in advance to
implement once the recovery is self-sustained
• Mitigate the impact of rising bankruptcies by increasing
resources for civil courts, implementing civil justice
reform bill and further support the non-performing loan
market and out-of-court settlement procedures
11RAISING INVESTMENT AND PRODUCTIVITY
GROWTH
12Investment lags other countries
Investment in selected OECD countries
2020 or latest
% of GDP
50
General government Households Corporations
45
40
35
30
25
20
15
10
5
0
Note: Households include non-profit institutions serving households (NPISHs).OECD unweighted average is computed using the available
OECD countries. For Estonia, Hungary, Italy and Slovenia, private investment is the difference between total investment and government gross
fixed capital formation. 13
Source: OECD National Accounts Statistics database; and OECD Economic Outlook database.R&D spending is low
Gross domestic expenditure on research and development
2019, % of GDP
5.0
Government Business enterprise Other
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
Note: Other includes primarily spending by higher education and non-profit organisations. Due to data unavailability the OECD
average excludes Australia, Chile, Costa Rica, New Zealand and Switzerland.
14
Source: OECD (2021), Main Science and Technology Indicators (database) http://oe.cd/msti.Uncertainty about regulations and taxes weighs on
green investment
Major obstacle to investment
2019, % of all firms
70
60
50
40
30
20
10
0
Note: Share of firms citing uncertainty about the regulatory environment and taxation as an obstacle to investing in activities to
tackle the impacts of weather events and emissions reduction. 15
Source: European Investment Bank (2020), EIB Investment Survey.An inefficient justice system hampers investment
Recovery rate from bankruptcy procedures
% invested
100
90
80
70
60
50
40
30
20
10
0
Note: The recovery rate is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation
or debt enforcement (foreclosure or receivership) proceedings. OECD is the median of OECD countries. 16
Source: World Bank (2020), Resolving Insolvency, Doing Business 2020.Productivity gains have been low
Average annual change in output per hour worked, 2012 to 2019
3.5 4.8
3.0
2.5
2.0
1.5
1.0
0.5
0.0
-0.5
Note: Output measured in USD, constant 2015 prices and PPP
17
Source: Calculations based on data from OECD Productivity database.The productivity gap largely reflects underperforming
service sectors
Average annual change in real gross value added per person employed
5
2000-07 2012-19
4
3
2
1
0
-1
Italy OECD Italy OECD
Manufacturing Services
Note: Unweighted OECD average of available countries. Due to data unavailability the OECD average excludes Colombia,
Mexico and Turkey.
18
Source: Calculations based on data from OECD Productivity database.Investment in manufacturing has risen, but not in
services
Real investment in manufacturing and services
Index, 2007 = 100
180
Manufacturing Services
160
Manufacturing: intellectual property Services: intellectual property
140
120
100
80
60
40
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Source: ISTAT and OECD calculations.
19Restrictive regulations in services limit business
dynamism
Occupational entry regulations (OER) indicator for professional services
3.5
Administrative burdens Qualification requirements Mobility restrictions
3.0
2.5
2.0
1.5 Average
1.0
0.5
0.0
Note: An indicator value of 0 indicates the absence of regulations, 6 reflects a fully regulated market. Regulations for Canada
and US represent the unweighted average of province/state level regulations.
Source: Von Rueden, C. and I. Bambalaite (2020), "Measuring occupational entry regulations: A new OECD approach", OECD
Economics Department Working Papers, No. 1606, OECD Publishing, Paris, https://doi.org/10.1787/296dae6b-en 20Key recommendations to raise investment and
productivity
• Reduce the stock of regulations
• Minimise regulatory barriers to entering professional
services, by using certification schemes.
• Introduce a national productivity board to set a research
agenda and raise the profile of productivity in the national
debate
• Provide certainty with a long-term plan on carbon prices
and supporting policies to ease transition costs.
21PUBLIC FINANCE REFORMS TO
SUPPORT FASTER GROWTH AND
JOB CREATION
22Not much room left for investment and education
Public expenditure in % of GDP
2019 or latest
Old age pensions
Compensation of employees
Education
Italy OECD
Public debt
Public investment
0 2 4 6 8 10 12 14
Source: OECD (2021), National Accounts Statistics (database).
23Poverty is high – particularly among younger Italians
Poverty rate by age group
2018 or latest
20
Italy EU22 OECD
18
16
14
12
10
8
6
4
2
0
0-17 26-40 65+
Note: Poverty rate at 50 % of median equivalised income after taxes and transfers. Whiskers indicate range of OECD
countries between the first and the last decile. 24
Source: OECD (2021), Income Distribution Database (IDD).Support to help jobseekers find work is low
Total spending per unemployed on active labour market policies
% of GDP per capita, 2018 or latest
76
50
45
40
35
30
25
20
15
10
5
0
Note: OECD average covers the countries shown in the graph.
Source: OECD (2021), Statistics on Labour Market Programmes (database); OECD (2021), Labour Force Statistics 25
(database).Spending on pensions is set to rise further
Old-age dependency ratio
90
2020 2050
80
70
60
50
40
30
20
10
0
Note: Number of individuals aged 65 and over per 100 people of working age defined as those aged between 20 and 64. Due
to data unavailability the OECD average excludes Colombia and Costa Rica. 26
Source: OECD (2019), Pensions at a Glance (database).Permanently reducing the tax wedge for more people
could boost employment
Average labour tax wedge
2019
% Italy Italy 2021, temporary cut in social security and EUR 100 tax credit OECD
50
40
30
20
10
0
Single without children (100% of the average wage) Couple with 2 children (100% and 67% of the average wage)
Household composition and earnings as % of average wage
Note: The “Italy incl. 2021 tax credit and social contribution rebate” relates only to the employees eligible for these measures,
and is not a workforce-wide value. OECD average is an unweighted average.
Source: OECD Tax database; Ministry of Finance and Economy, and OECD estimates for 2021. 27Main recommendations to raise employment
• Improve the composition of public spending with strengthened
expenditure reviews and a succinct set of policy performance
indicators.
• Reform taxes to support higher employment, with a lower tax wedge
and reduce income tax disincentives for second earners - particularly
women
• Increase access to adult skills attainment, with improved Training
Fund application processes and better coordinated public
employment services
• Improve access to quality childcare across all regions
• Contain pension spending by allowing the early retirement schemes
to expire, and link life expectancy and retirement age.
28THE NATIONAL RESILIENCE AND
RECOVERY PLAN CAN HELP SUSTAIN
INVESTMENTS AND GROWTH-
SUPPORTING REFORMS
29The National Recovery and Resilience Plan will
support investment and structural reforms
Next Generation EU grants and loans, % of GDP
25
Grants Loans
20
15
10
5
0
Note: 2020 GDP at current prices are used. Loans are assumed at 6.8% of 2019 gross national income for some countries. Actual amo unts may differ. Figure
does not include the additional own resources included in the Italian National Recovery and Resilience Plan. This is equivale nt to 1.2% of 2020 GDP. 30
Source: European Commission, https://ec.europa.eu/info/strategy/recovery-plan-europe_en; and EUROSTAT.Sustaining the National Recovery Plan reforms can
boost living standards
The impact of reforms on real GDP per capita
Thousand EUR
36
34
32
30
28
26
24
22
20
2020 GDP per capita 2030 GDP per capita with no .. with structural reforms and .. with additional structural
reforms investment in National Recovery reforms and efforts to support
and Resilience Plan employment
Source: OECD projections, assumes no impact from inflation. 31Reforms should boost growth which is key for lower debt
Public debt-to-GDP ratio, alternative reform scenarios
% of GDP
300
2020 policies, primary balance not adjusted for ageing expenses ¹
250 Implement National Recovery and Resilience Plan, primary balance of 1.5%
Additional recommended policy reforms, primary balance of 1.5%
200
150
100
50
2000 2010 2020 2030 2040 2050 2060
1. A primary balance of 1.5% is assumed, and then ageing expenses are added to the fiscal profile. This profile illustrates the
impact of ageing policies on the budget. It does not reflect an expected fiscal strategy.
Source: Ministry of Finance and Economy; OECD (2021), OECD Economic Outlook (database); D. Turner and Y. Guillemette 32
(2021) and OECD calculations.Strengthening the public sector’s effectiveness is key
Government effectiveness Readiness for economic Trust in government
2019 transformation 2020 or latest
2020
1.5 80 80
70 70
60 60
1.0
50 50
40 40
30 30
0.5
20 20
10 10
0.0 0 0
Italy EU22 OECD Italy EU18 OECD Italy EU22 OECD
Note: Whiskers show the range between the first to last decile of countries.
Sources: World Bank (2020), Worldwide Governance Indicators (database); World Economic Forum (2021), The Global 33
Competitiveness Report 2020; OECD (2021), How's Life: Well-being (database).Accelerating public investment can help lagging regions
Municipal governments’ average disbursement rates of EU public investment funds
Over 2014-20, by region and municipality size
%
100
Small Medium Large
80
60
40
20
0
North-east North-west Center South
Note: "Small’ municipalities" population is below 50 000, "medium" between 50 000 and 250 000, and large above 250 000.
Source: OpenCivitas database and OECD calculations.
34Capacity constraints to public investment need addressing
Major obstacles to municipal infrastructure investment
2019, % of all municipalities surveyed
Availability of funds
Italy
Technical capacity
EU
Length of regulatory process
Agreement among stakeholders
Regulatory uncertainty
Agreement with other municipalities
Technological uncertainty
Core infrastructure
0 10 20 30 40 50 60
35
Source: European Investment Bank Group Survey on Investment and Investment Finance 2020.Many public employees are nearing retirement
Public employees Public sector employees by age group
Total, per 1000 population, 2020 Central government, 2020
160
55 years or older 35-54 years old 18-34 years old
140 100
120 90
80
100 70
80 60
50
60 40
40 30
20
20
10
0 0
ITA
JPN
GBR
AUS
CAN
OECD
DEU
USA
FRA
ESP
ITA
SWE
JPN
GBR
OECD
CAN
DEU
USA
ESP
FRA
36
Source: OECD Economic Outlook database; and ILO, ILOSTAT (database)Progress with e-government will help but users’
take-up has lagged
OECD Digital Government Index Share of individuals using the internet to
2019 interact with public authorities
2019
0.8 100 %
0.7 90
2010
0.6 80
70
0.5
60
0.4 50
0.3 40
30
0.2
20
0.1
10
0 0
ITA
SWE
JPN
GBR
KOR
CAN
OECD
DEU
FRA
ESP
ITA
SWE
GBR
OECD
CAN
DEU
FRA
ESP
Note: The OECD Digital Government Index aims to measure the digital transformation of the public sector, understood as the
transition from e-government to digital government, measured across six dimensions. 37
Source: OECD Survey on Digital Government 1.0Main recommendations to raise public sector
effectiveness
• Rejuvenate the public sector workforce, through more
agile recruiting, training and career management
• Consolidate smaller agencies’ public procurement
activities
• Clarify competencies of different levels of government,
supported by bodies that encourage effective practices
• Continue providing an architecture and platforms that
enable public agencies’ digitalisation
38For more information
Disclaimers:
The statistical data for Israel are supplied by and under the responsibility of the relevant
Israeli authorities. The use of such data by the OECD is without prejudice to the status
of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under
the terms of international law.
This document and any map included herein are without prejudice to the status of or
sovereignty over any territory, to the delimitation of international frontiers and
boundaries and to the name of any territory, city or area.
http://www.oecd.org/eco/surveys/economic-survey-italy.htm
OECD Economics
OECD
39You can also read
