By Giuseppe Fonte and Gavin Jones
Rome (Multibagger) - Economy Minister Giancarlo Giorgetti expressed concerns on Tuesday that Italy's 1% economic growth target for this year may be challenging to achieve following downward revisions by national statistics bureau ISTAT.
ISTAT recently lowered the year-on-year GDP growth rates for the first and second quarters, leading to a reduced "acquired growth" figure at the end of the second quarter. This revision has made reaching the 1% growth target more difficult.
If there is no quarterly growth in the remaining two quarters, the full-year growth is projected to be at 0.4% compared to the previous year.
Giorgetti addressed lawmakers on Italy's budget plan, mentioning that while the revisions may impact the final reading for 2024, there are no concerns for future years. He also hinted at potential upward revisions to GDP data for 2023 and early 2024 by ISTAT.
The government's budget plan is built on conservative macroeconomic estimates, and Giorgetti emphasized a prudent approach to public finances in line with EU fiscal rules.
Italy aims to reduce its deficit sharply this year and in the following years to comply with EU regulations. The government believes it can exit the Excessive Deficit Procedure starting from 2027 by reducing the debt-to-GDP ratio.
The budget plan will include reforms in various policy areas, particularly in making the tax system more efficient. Giorgetti mentioned plans to update state estimates of property values for tax purposes, especially for properties benefiting from state-funded renovations.
Analysis:
The article discusses Italy's economic growth target and the challenges it faces due to GDP revisions. The revisions have made achieving the 1% growth target harder, with potential implications for the country's fiscal outlook. Minister Giorgetti highlighted the importance of prudent financial management and adherence to EU rules. The government's plan includes reforms to enhance tax efficiency and reduce the deficit, aiming to exit the Excessive Deficit Procedure by 2027. Overall, the content emphasizes the need for strategic economic planning and reform to ensure long-term financial stability for Italy.