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Debt control confidence: Italy anticipates keeping its debt below 140 per cent of gross domestic product (GDP) this year despite higher spending on home renovation incentives, according to a statement by Economy Ministry undersecretary Federico Freni.
Freni revealed at a business conference organised by The European House Ambrosetti think-tank that expenditure on incentive schemes for building renovations or energy efficiency enhancements would exceed 210 billion euros ($228 billion).
“We don’t have the precise number yet, but we are definitely above 210 billion euros … that’s how much we’ve spent on building incentive schemes,” he stated. Freni emphasised the necessity to meticulously plan and monitor public spending due to the inability to disregard the debt burden.
Forecast adjustment necessary
Given the higher-than-forecast cost of the incentives, Italy may need to revise its 2023 deficit and debt figures, currently standing at 7.2 per cent and 137.3 per cent of GDP, respectively.
Responding to enquiries about the possibility of the debt-to-GDP ratio surpassing 140 per cent this year, Freni firmly denied it.
Italy’s cabinet is scheduled to convene on April 9 to approve the Economic and Financial Document (DEF) containing the latest forecasts.
GDP growth revision
Earlier this week, sources indicated that the Treasury would project GDP growth of 1 per cent in 2024, down from the previous estimate of 1.2 per cent set in September. This adjustment aligns with the Bank of Italy’s forecast of 0.8 per cent growth, made on Friday.
The latest growth forecast exceeds the European Union’s current projection of 0.7 per cent, a figure that Economic Commissioner Paolo Gentiloni mentioned would likely be confirmed in June when the Commission publishes updated projections.
(With Reuters Inputs)
