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DBRS Morningstar: Italy's Recovery Plan Expected To Improve Human Capital

·5 min read

MADRID, October 21, 2021--(BUSINESS WIRE)--The Italian government's focus on promoting investment in Research and Development (R&D), improving the education system and strengthening worker employability through its National Recovery and Resilience Plan (NRRP1), should positively affect human capital development over the long-term. Strengthening human capital is one of the key factors underpinning an improvement in Italy's economic outlook. DBRS Morningstar calculates that Italy's government has scheduled for deployment funds of around EUR 77 billion (4.3% of GDP), out of a EUR 235.1 billion total envelope, the majority of which is to be spent by 2026. This expenditure, including the reforms attached, will likely have a direct and indirect impact on both the demand and the supply of human capital. This is expected to contribute to a more than doubling of potential economic growth from 0.6% to 1.4% by 2026 according to government estimates.

To achieve optimal results, great effort is needed to overcome weak capacity to spend, which tends to be constrained by red tape and to improve coordination between public entities. Moreover, policy continuity to work through general internal resistance including administrative bureaucracy and additional reforms, such as encouraging growth of company size and increasing school autonomy, will be required to achieve the desired results.

Key Highlights:

  • R&D investment is expected to rise supporting demand for skilled workers.

  • Better co-ordination between firms and universities should positively affect human capital.

  • Reforms might come up against internal resistance and weak coordination, requiring more time and government policy continuity.

"Beyond important reforms, including the public administration and the justice system we have to consider the impact the Italian NRRP could have on human capital. This is key in our view as it could positively affect both labour productivity and the supply of labour over the medium- to long-term. Nevertheless, a large share of the NRRP’s resources are one-off and additional funding might be needed in the future. Moreover, It is difficult to make things happen in Italy therefore we will monitor the effectiveness of the legislative implementing process and if internal opposition to reforms hinders the success of the plan" said Carlo Capuano, Vice President in the Global Sovereign Ratings Group.

To view the full report, click here: https://www.dbrsmorningstar.com/research/386243/italys-recovery-plan-expected-to-improve-human-capital

The DBRS Morningstar group of companies consists of DBRS, Inc. (Delaware, U.S.)(NRSRO, DRO affiliate); DBRS Limited (Ontario, Canada)(DRO, NRSRO affiliate); DBRS Ratings GmbH (Frankfurt, Germany)(EU CRA, NRSRO affiliate, DRO affiliate); and DBRS Ratings Limited (England and Wales)(UK CRA, NRSRO affiliate, DRO affiliate). For more information on regulatory registrations, recognitions and approvals of the DBRS Morningstar group of companies, please see: https:// www.dbrsmorningstar.com/research/highlights.pdf.

The DBRS Morningstar group of companies are wholly-owned subsidiaries of Morningstar, Inc. © 2021 DBRS Morningstar. All Rights Reserved.

The information upon which DBRS Morningstar ratings and other types of credit opinions and reports are based is obtained by DBRS Morningstar from sources DBRS Morningstar believes to be reliable. DBRS Morningstar does not audit the information it receives in connection with the analytical process, and it does not and cannot independently verify that information in every instance. The extent of any factual investigation or independent verification depends on facts and circumstances. DBRS Morningstar ratings, other types of credit opinions, reports and any other information provided by DBRS Morningstar are provided "as is" and without representation or warranty of any kind. DBRS Morningstar hereby disclaims any representation or warranty, express or implied, as to the accuracy, timeliness, completeness, merchantability, fitness for any particular purpose or non-infringement of any of such information. In no event shall DBRS Morningstar or its directors, officers, employees, independent contractors, agents and representatives (collectively, DBRS Morningstar Representatives) be liable (1) for any inaccuracy, delay, loss of data, interruption in service, error or omission or for any damages resulting therefrom, or (2) for any direct, indirect, incidental, special, compensatory or consequential damages arising from any use of ratings and rating reports or arising from any error (negligent or otherwise) or other circumstance or contingency within or outside the control of DBRS Morningstar or any DBRS Morningstar Representative, in connection with or related to obtaining, collecting, compiling, analyzing, interpreting, communicating, publishing or delivering any such information. No DBRS Morningstar entity is an investment advisor. DBRS Morningstar does not provide investment, financial or other advice. Ratings, other types of credit opinions, other analysis and research issued or published by DBRS Morningstar are, and must be construed solely as, statements of opinion and not statements of fact as to credit worthiness, investment, financial or other advice or recommendations to purchase, sell or hold any securities. A report with respect to a DBRS Morningstar rating or other credit opinion is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. DBRS Morningstar may receive compensation for its ratings and other credit opinions from, among https://www.dbrsmorningstar.com/disclaimer/ others, issuers, insurers, guarantors and/or underwriters of debt securities. DBRS Morningstar is not responsible for the content or operation of third party websites accessed through hypertext or other computer links and DBRS Morningstar shall have no liability to any person or entity for the use of such third party websites. This publication may not be reproduced, retransmitted or distributed in any form without the prior written consent of DBRS Morningstar. ALL DBRS MORNINGSTAR RATINGS AND OTHER TYPES OF CREDIT OPINIONS ARE SUBJECT TO DISCLAIMERS AND CERTAIN LIMITATIONS. PLEASE READ THESE DISCLAIMERS AND LIMITATIONS AT https://www.dbrsmorningstar.com/about/disclaimer. ADDITIONAL INFORMATION REGARDING DBRS MORNINGSTAR RATINGS AND OTHER TYPES OF CREDIT OPINIONS, INCLUDING DEFINITIONS, POLICIES AND METHODOLOGIES, ARE AVAILABLE ON https://www.dbrsmorningstar.com. Users may, through hypertext or other computer links, gain access to websites operated by persons other than DBRS Morningstar. Such hyperlinks are provided for convenience only, and are the exclusive responsibility of the owners of such websites. DBRS Morningstar does not endorse the content, the operator or operations of third party websites. DBRS Morningstar is not responsible for the content or operation of such websites and DBRS Morningstar shall have no liability to you or any other person or entity for the use of third party websites.

The English version of this press release prevails.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211021005425/en/

Contacts

Dennis Ferreira - european.communications@dbrsmorningstar.com

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