Connect with us
Finance Digest is a leading online platform for finance and business news, providing insights on banking, finance, technology, investing,trading, insurance, fintech, and more. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

NEWS

Italy cuts growth forecasts and says debt set to rise

Italy cuts growth forecasts and says debt set to rise

By Giuseppe Fonte and Matteo Negri

ROME (Reuters) -The Italian government on Tuesday cut its growth forecast for this year and next, reflecting an uncertain international outlook, and said public debt was set to rise despite its efforts to curb the annual budget deficit.

In its Economic and Financial Document, the Treasury forecast gross domestic product in the euro zone’s third largest economy to grow by 1% this year, down from a 1.2% goal in September.

The latest projection remains significantly above the consensus of most independent bodies, who project Italian growth of around 0.7%.

The government set a GDP growth estimate of 1.2% next year, down from the previous 1.4%.

Economy Minister Giancarlo Giorgetti told reporters the revisions factored in “a complicated international and geopolitical framework,” referring to the conflicts in Ukraine and the Middle East.

On the public finance front, the government confirmed its 2024 budget deficit projection at 4.3% of national output.

If achieved, that will mark a sharp reduction from the 7.2% ratio registered in 2023, when Rome far overshot its official target due to the impact of costly fiscal incentive schemes for home renovations.

Giorgetti said these incentives had cost the public purse some 219 billion euros ($237.99 billion) over the last four years. The most generous, the so-called ‘Superbonus’, allowed homeowners to reclaim from their taxes 110% of the cost of energy-saving building work.

For 2025, the Treasury nudged up its deficit projection to 3.7% from a previous 3.6% goal, while the fiscal gap is seen at 3% in 2026, slightly above the 2.9% target set last year.

Giorgetti said these estimates were forecasts rather than policy targets, as EU fiscal rules are currently being reviewed so the government lacks a clear reference framework to work with.

He said he was ready to intervene with corrective measures to “exactly” meet the previous, slightly tougher deficit targets for the next two years.

DEBT TO CLIMB

Italy’s public debt, the second largest in the euro zone as a proportion of output and under close scrutiny by rating agencies, will follow a rising trend over the next three years, according to the latest forecasts.

Giorgetti said this was due to the “devastating impact” of the Superbonus, which will continue to weigh on debt despite government curbs on the incentives, as people detract the building work completed from their tax bills.

Debt is estimated at 137.8% of gross domestic product this year, up from the 137.3% reported in 2023. The ratio will rise to 138.9% in 2025 and to 139.8% in 2026.

To keep the trend in check, Giorgetti said he would press ahead with plans to raise around 1% of GDP, or roughly 20 billion euros, from asset sales through 2026.

Despite the commitment to rein in the deficit, the government said it aimed to extend to 2025 temporary cuts to social contributions in place this year and, if budget constraints allow, prolong income tax cuts for people earning up to 28,000 euros per year.

($1 = 0.9202 euros)

(Editing by Gavin Jones and Christina Fincher)

Continue Reading

Why pay for news and opinions when you can get them for free?

       Subscribe for free now!


By submitting this form, you are consenting to receive marketing emails from: . You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Posts