By Giuseppe Fonte
ROME (Multibagger) - Italy is on track to balance its primary budget this year, excluding interest payments on government debt, according to Economy Minister Giancarlo Giorgetti. This move is part of a larger fiscal plan aimed at addressing the country's high debt levels.
Giorgetti stated that Italy aims to achieve a balanced primary budget as early as 2024, which would help in keeping the mammoth debt, currently at almost 140% of GDP, in check.
The country's fiscal situation has shown signs of improvement, with the Treasury forecasting a primary budget deficit of 0.4% of GDP for 2024, down from earlier estimates.
Italy, which faced an Excessive Deficit Procedure by the EU this year, is committed to bringing its deficit below the EU's 3% of GDP ceiling by 2026, as outlined in its fiscal plan set to be submitted to Brussels by early October.
As part of its strategy, the government plans to limit the annual increase in net primary expenditure to around 1.5%, while also considering reforms and strategic investments to comply with the EU's fiscal rules.
The upcoming budget plan will take into account revised economic growth data, with Giorgetti noting that while there will be a modest upward correction in GDP figures, it will not fully address the fiscal challenges.
Despite the constraints, the government aims to make temporary cuts to social contributions and tax cuts for low and middle-income earners permanent, a move that would cost the state coffers approximately 15 billion euros per year.
($1 = 0.8957 euros)