2023-07-04 09:17:38
Italy’s public deficit increased to 12.1% of gross domestic product in the first quarter, compared to 11.3% over the same period of 2022, in a context of “reduction of the tax burden”, announced Tuesday the National Institute of Statistics (Istat). For the year as a whole, however, Rome expects a deficit of 4.5% of GDP, down sharply from the 8% recorded in 2022, thanks to the lull in the economy. energy prices which reduces subsidies to households and businesses.
In the first quarter, the public deficit “deteriorated compared to the same quarter of 2022 due to a lower contribution of revenue which resulted in a reduction in the tax burden”, comments Istat in a press release. “Household purchasing power increased by 3.1% compared to the previous quarter, due to a significant slowdown in price dynamics”, further notes Istat.
In the fourth quarter, Italy’s public deficit had increased to 5.6% of GDP, against 4.9% in the same period of 2021, the body confirmed. A system of very generous tax incentives, supposed to make homes less energy-consuming, had caused Italy’s deficits to skid over the past three years, which were revised significantly upwards in early March.
The public deficit thus rose to 8% of GDP in 2022, while the government of Giorgia Meloni intended to reduce it to 5.6%. Rome had to comply with new Eurostat regulations on tax credits published in February. The Italian government pledged in its economic roadmap published in April to “gradually” but “sustainably” reduce the public deficit, which should drop to 3.7% of GDP in 2024, 3% in 2025 and 2.5 % in 2026. At the same time, the public debt ratio is expected to decline to 140.4% of GDP in 2026, from 144.4% in 2022, while remaining well above the euro area average.
In mid-June, the Bank of Italy had revised its forecast for economic growth significantly upwards for this year, now counting on 1.3%, against 0.6% previously. Italy saw its GDP increase by 0.6% in the first quarter compared to the previous one, thus signing growth above the average for the euro zone.
Italy’s public deficit increased to 12.1% of gross domestic product in the first quarter, compared to 11.3% over the same period of 2022, in a context of “reduction of the tax burden”, announced Tuesday the National Institute of Statistics (Istat). For the year as a whole, however, Rome expects a deficit of 4.5% of GDP, down sharply from…
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