The International Monetary Fund, while praising Italy's resilience to adverse shocks and "strong recovery in output and employment," noted that "the fiscal deficit has widened sharply, the debt-to-GDP ratio is very high, and core inflation remains high". In addition, "the decline in the working-age population could reduce economic growth in the long run". This is what emerges in the paper that the International Monetary Fund published at the conclusion of its Article IV consultations with Italy. Considering the fact that "risks are predominantly on the downside," the IMF highlights "the need to focus on fiscal adjustment and ambitious structural reforms to raise productivity and potential growth, improve energy security, and achieve the climate goals" that have been set. The IMF also encourages Italy "to implement the National Recovery and Resilience Plan supported by NextGenerationEe financing in a timely and effective manner". For this, according to the Fund, it is important to "decisively reduce the debt-to-GDP ratio". The Washington-based institution also believes that "the overall sovereign stress risk for Italy is moderate" and that, "in the medium to long term, a strong primary surplus is needed to support a steady and decisive debt reduction". Consolidation "will need to be supported by well-defined and efficient measures," including tax reform that broadens the tax base, continued action on tax compliance, and pension reform
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