ROME (Reuters) – – Italy’s new public finance targets to be unveiled on Wednesday will show the government committing to more ambitious deficit and debt reduction even as the economic growth outlook crumbles amid market turmoil over U.S. trade policy, sources said.
Italy’s multi-year budget framework will estimate the 2025 budget deficit at around 3.1% of national output, slightly better then a 3.3% target set in September, said the sources, who asked not to be named.
Giorgia Meloni’s government will likely confirm the goal of bringing the fiscal gap below the European Union’s 3% of GDP ceiling in 2026, the sources added.
Italy is under a so-called Excessive Deficit Procedure by the European Commission and its new budget framework, which is aimed at cutting the fiscal gap in line with EU requirements, must also comply with the latest reform of the bloc’s fiscal rules.
The public debt, proportionally the second-highest in the euro zone after Greece’s, is seen at around 136.6% of GDP this year, down from a previous 136.9% target made in September.
The economic plan, to be approved by the cabinet at meeting beginning at 6:00 pm (1600 GMT) forecasts gross domestic product will grow by 0.6% this year, down from a 1.2% target made in September, Reuters reported on Tuesday.
Next year’s growth in the euro zone’s third largest economy is seen at 0.8%, down from a previous 1.1%, while growth is also seen at 0.8% in 2027 and 2028.
Under U.S. President Donald Trump’s plans announced last week Italy, which has a large trade surplus with the United States, will be subject to a general tariff of 20% along with other European Union countries.
(Reporting by Giuseppe Fonte, editing by Gavin Jones)
Comments