Italy should broaden its tax base, enhance its privatization program and open up parts of its economy to more competition to help deficit-reduction goals, the Organization for Economic Cooperation and Development said.
Efforts by Prime Minister Mario Monti to boost productivity and slash the deficit are “courageous” and “ambitious,” though they need to be bolstered amid a recession, OECD Secretary General Angel Gurria said in a report today.
“The resolute implementation and continuation of these reforms, as well as continued fiscal consolidation efforts, will be essential,” Gurria wrote in the introduction to 33 pages of recommendations. Italy needs to “not only avoid the unraveling of already approved reforms but also ensure continuity in the reform agenda going forward,” he said.
The extension of Monti’s effort could add an additional 4 percentage points to gross domestic product over a decade, the OECD estimates. The Paris-based OECD advises its 34 member governments on economic policy.