OECD Economic Surveys: Italy

English
Frequency
Every 18 months
ISSN: 
1999-0340 (online)
ISSN: 
1995-3283 (print)
DOI: 
10.1787/19990340
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OECD’s periodic surveys of the Italian economy. Each edition surveys the major challenges faced by the country, evaluates the short-term outlook, and makes specific policy recommendations. Special chapters take a more detailed look at specific challenges. Extensive statistical information is included in charts and graphs.

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OECD Economic Surveys: Italy 2017

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Author(s):
OECD
15 Feb 2017
Pages:
156
ISBN:
9789264270190 (EPUB) ; 9789264270183 (PDF) ;9789264270152(print)
DOI: 
10.1787/eco_surveys-ita-2017-en

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Italy is recovering from a deep and long recession. Structural reforms, accommodative monetary and fiscal conditions, and low commodity prices have helped the economy to turn the corner. The Jobs Act, part of a wide and ambitious structural reform programme, and social security contribution exemptions have improved the labour market and raised employment. Yet, the recovery remains weak and productivity continues to decline. Returning the banking system to health will be crucial to revive growth and private investment. More investment in infrastructure will be essential to raise productivity. The government has made significant progress on tackling structural impediments to growth and productivity. Yet public-administration inefficiencies, slow judicial processes, poorly designed regulation and weak competition still make it difficult to do business in Italy. Labour and capital resources are trapped in low-productivity firms, which hold down wages and well-being. Innovative start-ups and SMEs continue to suffer from difficult access to bank and equity finance. Literacy scores are low and job-skill mismatch is one of the highest among OECD countries, depressing earnings and well-being. Many workers are under-skilled in the jobs they hold, highlighting mismatches between workers skills and those required by employers. Improving the education system and labour market policies are crucial to raising real wages, job satisfaction and living standards. The Jobs Act and the Good School reform go in the right direction and need to be fully implemented.

SPECIAL FEATURES: RAISING INVESTMENT; ENHANCING SKILLS

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  • Basic statistics of Italy, 2015 or latest year available

    This Survey is published on the responsibility of the Economic and Development Review Committee of the OECD, which is charged with the examination of the economic situation of member countries.The economic situation and policies of Italy were reviewed by the Committee on 11 January 2017. The draft was revised in the light of the discussions and given final approval as the agreed report of the whole Committee on 24 January 2017.The Secretariat’s draft report was prepared for the Committee by Mauro Pisu and Paula Garda under the direct supervision of Patrick Lenain and Asa Johansson, and the general supervision of Alvaro Pereira and Robert Ford. Statistical research assistance was provided by Damien Azzopardi and Milenko Fadic and administrative support by Brigitte Beyeler and Raquel Paramo.The Survey also benefitted from contributions by Dan Andrews, Silvia Appelt, David Bartolini, Piet Battiau, Fabio Berton, Bert Bryce, Joanne Caddy, Flippo Cavassini, Thomas Dannequin, Emma Duchini, Michael Hewetson, Nick Johnstone, Christine Lewis, Giorgia Maffini, Fabio Manca, Giuseppe Nicoletti, Marco Marchese, Dirk Pilat, Sebastian Schich, Kevin Shoom, Raffaele Trapasso, Mariagrazia Squicciarini, Litsa Vavakis, Gert Wehinger, Juan Yermo.The previous Survey of Italy was issued in February 2015.

  • Executive summary

    Italy is recovering after a deep and long recession. Structural reforms, accommodative monetary and fiscal conditions, and low commodity prices have helped the economy to turn the corner. The Jobs Act, part of a wide and ambitious structural reform programme, and social security contribution exemptions have improved the labour market and raised employment. Yet, the recovery remains weak and productivity continues to decline. Returning the banking system to health will be crucial to revive growth and private investment. More investment in infrastructure will be essential to raise productivity.

  • Assessment and recommendations

    Italy is emerging from a long and deep recession (). Macroeconomic policies initiated by the Italian government and supportive monetary policy have contributed to the turnaround, along with lower commodity prices. The Jobs Act and social security contribution exemptions jolted the labour market, leading to rising employment and higher consumer spending. Mildly expansionary fiscal policy is supporting growth. Impressive progress has been made on the structural reform programme. Reforms in different areas, including the labour market, school system and public administration, have been passed and implemented or are in the course of implementation (). Greater focus has also been put on past reforms, with a sharp reduction in the backlog of decrees needed to implement them. The rejection of the constitutional reform in a referendum in December 2016 has heightened political uncertainty but the structural reform process must continue if Italy is to build a more inclusive society and improve growth prospects.

  • Progress in structural reforms

    The objective of this Annex is to review action taken since the previous Survey (February 2015) on the main recommendations from previous Surveys.

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  • Expand / Collapse Hide / Show all Abstracts Thematic chapters

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    • Promoting a private investment renaissance

      Boosting investment is key to supporting the nascent recovery and reviving stagnant productivity. Aggregate investment has declined markedly since the start of the global financial crisis, especially in services. Italy’s investment is so low that the capital stock is now declining, hurting potential output growth. Raising investment will hinge on improving insolvency procedures, enhancing business dynamism, strengthening the innovation system and targeting incentives towards start-ups and innovative SMEs, overcoming problems in the banking sector and restarting lending to firms in addition to diversifying sources of firms’ finance.

    • Enhancing employability and skills to meet labour market needs

      The various deficiencies of the labour market and the educational system have resulted in high unemployment, low labour force participation, low skills levels and high skill mismatch. Job creation is key to tackling the high unemployment rates, especially for the young and long-term unemployed. Promoting jobs without paying attention to their quality and to the skills required by employers may have adverse impact on welfare and productivity. The Jobs Act and Good School (Buona Scuola), two major reforms of the labour market and the educational system, are good steps in the right direction. The Jobs Act and the temporary social security contribution exemptions have contributed to raise employment. By strengthening job search and training policies, the Jobs Act can enhance jobseekers’ employability. Increasing the effectiveness of public employment services, given the low spending level, remains a challenge. The Good School reform has the potential to improve school outcomes and provide more aligned skills to the job market. Increasing employability by upgrading skills that match employer needs remains a priority. Business involvement in education and training institutions at all educational levels will be paramount to ensure the provision of relevant skills, the availability of traineeship and apprenticeship places and provide on-the-job training. The adaptability of skills could be encouraged by lowering barriers to labour mobility and boosting work-based learning.

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