Under the provisions of Italian and European law, the PBO is charged with conducting an independent evaluation of the macroeconomic forecasts contained in the Government’s policy documents (the Economic and Financial Document and the associated Update). The aim of the exercise is to limit any excessive optimism in forecasts that might undermine the credibility of the public finances. The validation process, using procedures agreed with the MEF in a memorandum, is applied first to the trend forecasts (i.e. assuming no changes in public finance measures) and then to the policy forecasts (those that reflect the effects of budget measures). Each of these procedures is structured into four phases:
- any comments by the PBO;
- transmission of the macroeconomic scenario by the MEF to the PBO;
- transmission of any modified version of the macroeconomic scenario by the MEF to the PBO
- final validation of the PBO, which can be positive or negative.
The validation letters with any comments are published on the web site of the PBO after the Government has sent to Parliament the policy document (EFD or Update) to which they refer.
