Rome, 12 Nov. (LaPresse) – There is an “additional burden on credit institutions and insurance companies, following the measures that affected them last year. The increased tax burden affects sectors with sound earnings and capital positions. This does not, however, diminish the importance of a stable and predictable regulatory framework: frequent or unexpected changes in taxation increase uncertainty and influence operators’ investment decisions.” This was stated by Andrea Brandolini, Head of the Economics and Statistics Department of the Bank of Italy, during a hearing on the budget bill before the Budget Committees of the Chamber of Deputies and the Senate. “It can be estimated that the net impact of the budget package stems from measures that increase the deficit by around 26 billion euros per year on average over the next two years and by 20 billion in 2029, against funding measures amounting to approximately 13 billion on average in 2027-28 and nearly 16 billion in 2029. The budget package covers a large number of specific areas, with measures often limited in size and, in some cases, still to be defined in detail,” Brandolini continued. “The main sources of uncertainty are global in nature and reflect the unpredictability of geopolitical developments and existing vulnerabilities in financial markets. Risks are predominantly tilted to the downside for growth and to the upside for inflation. According to Istat’s preliminary estimate, GDP remained unchanged in the third quarter of the year compared with the previous quarter. Economic activity increased in the services sector but contracted in industry. The positive contribution of domestic demand was entirely offset by the negative contribution of net foreign demand. Over the past month, upward pressures on commodity prices have increased further, particularly for natural gas, resulting in a sharp rise in inflation. The Harmonised Index of Consumer Prices (HICP) rose by 5.6 per cent year-on-year in October, driven by energy and food components. The effects on the prices of other goods and services have so far been limited. These developments do not significantly alter the outlook for economic activity, but highlight the considerable instability of the economic environment,” Brandolini concluded.
Budget, Bank of Italy on banks: “Unexpected taxes increase uncertainty and weigh on investment”
Rome, 12 Nov. (LaPresse) – There is an “additional burden on credit institutions and insurance companies, following the measures that affected them last year. The increased tax burden affects sectors with sound earnings and capital positions. This does not, however, diminish the importance of a stable and predictable regulatory framework: frequent or unexpected changes in taxation increase uncertainty and influence operators’ investment decisions.” This was stated by Andrea Brandolini, Head of the Economics and Statistics Department of the Bank of Italy, during a hearing on the budget bill before the Budget Committees of the Chamber of Deputies and the Senate. “It can be estimated that the net impact of the budget package stems from measures that increase the deficit by around 26 billion euros per year on average over the next two years and by 20 billion in 2029, against funding measures amounting to approximately 13 billion on average in 2027-28 and nearly 16 billion in 2029. The budget package covers a large number of specific areas, with measures often limited in size and, in some cases, still to be defined in detail,” Brandolini continued. “The main sources of uncertainty are global in nature and reflect the unpredictability of geopolitical developments and existing vulnerabilities in financial markets. Risks are predominantly tilted to the downside for growth and to the upside for inflation. According to Istat’s preliminary estimate, GDP remained unchanged in the third quarter of the year compared with the previous quarter. Economic activity increased in the services sector but contracted in industry. The positive contribution of domestic demand was entirely offset by the negative contribution of net foreign demand. Over the past month, upward pressures on commodity prices have increased further, particularly for natural gas, resulting in a sharp rise in inflation. The Harmonised Index of Consumer Prices (HICP) rose by 5.6 per cent year-on-year in October, driven by energy and food components. The effects on the prices of other goods and services have so far been limited. These developments do not significantly alter the outlook for economic activity, but highlight the considerable instability of the economic environment,” Brandolini concluded.