Extortion
Italy targets deficit to fall to 3% this year despite sluggish growth
Italy will cut its budget deficit to 3% of national output this year, the government said on Thursday,
ROME (Reuters) -Italy will cut its budget deficit to 3% of national output this year, the government said on Thursday, below a previous target of 3.3% and inside the European Union’s 3% ceiling for the first time since 2019, before the COVID-19 pandemic.
The fiscal consolidation should allow Giorgia Meloni’s government to exit an EU infringement procedure for countries running excessive deficits by mid-2026, provided Brussels is convinced that Rome’s improved finances can be sustained in coming years.
The procedure restricts offending countries’ flexibility with regard to taxation and spending policies, as they must cut their fiscal deficit by a prescribed amount each year.
Rome’s 2026 budget framework approved at an evening cabinet meeting said the deficit would fall to 2.8% of gross domestic product (GDP) next year, confirming a previous target set in April.
“We are confirming the line of firm and prudent responsibility that takes into account the need to maintain public finance stability,” in compliance with European rules, Economy Minister Giancarlo Giorgetti said in a statement.
(Reporting by Giuseppe Fonte and Gavin Jones)
By Giuseppe Fonte and Gavin Jones