EU cuts Italy GDP outlook, crimping room for Meloni's budget promises

STORY CONTINUES BELOW THESE SALTWIRE VIDEOSBy Giuseppe Fonte

The government in Rome, which is due to update a raft of economic projections by Sept. 27, forecast in April GDP growth of 1% this year and 1.5% in 2024. "The phasing out of the extraordinary and temporary incentives for building improvements decided during the COVID-pandemic, which pushed construction activity up sharply in the past two years, contributed to this development," the European Commission said.

Lower-than-expected growth reduces tax revenues and makes it more difficult to meet budget deficit targets. In Italy's case, these have already been compromised by a ruling from EU statistics agency Eurostat over how home incentives should be classified in state accounts.

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