The government in Rome didn't make any "significant deviation" in the budget bill, Minister of Economy and Finance Roberto Gualtieri told the European Commission. The ministry said the document is "moderately expansive" and "consistent" with the "flexibility" enabled by the framework of the Stability and Growth Pact. The foreseen increase in the structural deficit by 0.1 percentage points of gross domestic product compares to a decrease of 0.6 points required by the rules.
Gualtieri called the change "slight deterioration" and said the trajectory for the budget balance is consistent with improvements on a structural basis by 0.2 points per year both for 2021 and 2022. Total deficit is projected at 2.2% for 2019 after which Italy targets two annual reductions by 0.4 points each. He added the output gap will be larger than 1.5 percentage points in 2020. In the section for extraordinary events, the cabinet of Prime Minister Giuseppe Conte allocated 0.2 points of GDP.
"We are also confident that our fiscal consolidation and structural reform efforts will lead to a further decline in the sovereign spread, yielding budgetary savings on interest expenditure and an additional improvement in the structural balance", the minister stated.
