Final, the Office of the Parliamentary Budget warning: the limit estimates, risk reduction of debt – Il Sole 24 Ore

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This article was published April 11, 2016 at 16:44.
the last change is the April 11, 2016 at 16:46.

“the possible emergence of negative surprises in terms of real growth and inflation would put at risk the dynamics of nominal GDP and, with it, the downward path of the debt / GDP ratio ‘set out in Def launched last Friday by the government, to 132.4% this year (from 132.8% in 2015) and 130.9% in 2017. This was written by the Parliamentary budget Office in the note validation of macro trend estimates, motivating the risk downward with the fact that the current scenario outlined by the government in Def “is placed at the upper limit of ‘range of estimates of the UPB panel “

UPB: estimates of the maximum limit, debt declining at risk
the Parliamentary budget Office highlights the” uncertainties “related to international scenario, and in particular to oil price and the euro exchange rate. If the estimates for oil (towards $ 50 a barrel) are within the range, “an additional element of risk” has instead made “by the possibility of an evolution of the euro less favorable than assumed in setting MEF ( invariance of the exchange rate), with the effects of lower supporting growth and weaker boost to inflation than assumed in that context. ”

Def, parliament relationship: risk downward GDP in 2016
Risk scenarios that in fact the government does not neglect. In the report accompanying the Parliament Def, in fact, the estimated growth of GDP for 2016, 1.2% (already cut than autumn) can be subject to downside risks. “The forecast is still based on relatively optimistic expectations about the domestic demand and the ability of Italian companies to expand their exports in a context of increased difficulty, and is therefore also subject to downside risks,” says the document.

government will use all flexibility allowed
the government, in its report accompanying the Def, also confirms the intention to use “all the flexibility permitted” by the stability Pact and growth. It “continues to work towards a technical solution for the adoption of more flexible potential GDP calculation methods.” The product gap of almost twenty percentage points compared to the pre-crisis trend, says the report, “is unprecedented severity and demanded a time prolonged adjustment effort. This figure does not emerge properly using the method for calculating potential output followed by the European Commission, according to which you get an “output gap” for 2016 of only 1.5 percentage points (winter forecast), which is already in chiderebbe 2018 should come true in the coming years of economic recovery forecasts. ”

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