The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and national and international economic developments.
Michal Andrle, Shafik Hebous, Alvar Kangur, and Mehdi Raissi
INTERNATIONAL MONETARY FUND
Published in late 2017, the Italian medium-term fiscal plan aims to achieve structural balance
by 2020, although concrete, high-quality measures to meet the target are yet to be specified.
This paper seeks to contribute to the discussion by (i) assessing spending patterns to identify
areas for savings; (ii) evaluating the pension system; (iii) analyzing the scope for revenue
rebalancing; and (iv) putting forward a package of spending cuts and tax rebalancing that is
growth friendly and inclusive, could have limited near-term output costs, and would achieve
a notable reduction in public debt over the medium term. Such a package could help the
authorities balance the need to bring down public debt and, thus, reduce vulnerabilities while
supporting the economic recovery.