The fourth wave of COVID-19 has put public finance bills at risk

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The hypothesis of the partial efficacy of vaccines against the variants of Covid-19 raised at the end of September through the update to Def has become a reality. However, the features of the opposite scenario identified by the technicians at the Ministry of Economy may come true along with the more optimistic forecasts underlying the public finance program.

Translated into numbers, in the Nadef hypothesis, the extension of the fourth pandemic wave that translates into new restrictive measures to economic activity would mean a 1.4% reduction in the growth trend scheduled for next year. In practice, the underlying dynamic of GDP will stop at 2.8% (not 1.8% as wrongly written in the document) rather than run to 4.2%, making real growth driven by the maneuver now under discussion in the Senate 3.3% instead of 4.7 percentile for the target set by the government.

This whirlwind of percentages serves to gauge the alarm about the re-emergence of the pandemic in the public accounts, particularly on the deficit and debt reduction line that is the heart of the 2022 programme. But there is more.

slowdown risk

Because a new slowdown in the economy, which could also be due to the net deterioration of the situation in countries such as Great Britain and Germany, which are among our main trading partners, would feed pressure on the government for a new deviation from the balance. Who is already planning more than one major majority advocate for February, once the quirinal vote is passed which already raises more than one unknown factor on the government.

It’s too early to guess the numbers

Asking for a new deficit, for which it is too early to assume figures on some basis, would first of all serve to offset money for expensive bills, which have so far absorbed resources of 9.3 billion believed to be insufficient to protect the spring rate increases.