EU: Italy budget will bring rising deficit, slower growth

Brussels (dpa) - The European Commission issued a fresh warning to Italy on Thursday, projecting that its 2019 deficit will be higher, and economic growth lower, than the forecasts issued by Rome.

In its autumn forecast for the eurozone, the commission projected that Italy will run a budget deficit of 2.9 per cent in 2019 and 3.1 per cent in 2020.

Those are above the deficit of 2.4 per cent projected in the draft budget of Italy's right-wing government for 2019 through 2021.
The European Commission has rejected that draft budget, and Rome must resubmit a revised plan by November 13 or face the possibility of sanctions for violating European Union budget rules.
The commission also estimated that Italy's gross domestic product (GDP) growth will be lower than Rome's own forecasts, clocking 1.2 per cent in 2019 and 1.3 per cent in 2020.
Those are below Italy's estimates of 1.5 per cent and 1.6 per cent for 2019 and 2020.
The commission's GDP estimates place Italy at the bottom of the eurozone. Overall, the commission projected that the 19-member eurozone economy will expand by 1.9 per cent in 2019, down slightly from 2.1 per cent in 2018.
As positive factors underpinning sustained growth and falling unemployment in the eurozone, the commission highlighted rising domestic consumption and investment.
However, within the EU, "doubts about the quality and sustainability of public finances in highly indebted member states could spill over to domestic banking sectors, raising financial stability concerns and weighing on economy activity," the commission warned in a press release.

Thursday, November 8th 2018

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