Italy's GDP will rise by a projected
4.5% this year, according to the DEF economic and financial
blueprint approved by the government, premier's office sources
said Thursday.
This will be followed by 4.8% growth in 2022, 2.6% in 2023 and
1.8% in 2024, the DEF says, "unprecedented levels of growth in
the last decade".
But if vaccines show only limited effectiveness, then growth
this year will be just 2.7% this year and 2.6% next, the DEF
said.
The DEF will also include a 40 billion euro budget adjustment,
the latest to fund COVID relief and boost firms, including 30
billion for investments.
Premier Mario Draghi told his cabinet that the goal was growth
and there would soon be expansionary measures, according to
those present.
The 40 billion variation, coupled with a previous 32 billion
adjustment, will push the budget deficit out to 11.8% of GDP
this year, premier's office source said after the approval of
the document, stressing that this "very high level is due to the
measures of support for the economy and the fall in GDP".
The deficit will then fall to 5.9% in 2022, 4.3% in 2023 and
3.4% in 2024, while the deficit will start heading back below 3%
from 2025 on, the premier's office sources said.
The public debt, meanwhile, will rise to 159.8% of GDP, its
highest in 100 years, to fall to 156.3% in 2022, 155% in 2023
and 152.7% in 2024, premier's office sources said after the
cabinet meeting that OK'd the DEF.
Italy's economy is set to rebound this year from an
unprecedented peacetime recession last year due to COVID-19.
Economy Minister Daniele Franco said the new measures would be
mainly aimed at the self-employed and businesses and "will focus
resources on boosting the resilience of the companies most
highly impacted by the closures, as well as on credit
availability and capitalization".
He said "interventions will be swift".
Franco said the National Recovery and Resilience Plan (PNRR)
would amount to some 237 billion euros and would give an
"unprecedented shock" to boost the economy.
Franco added that the government would implement a tax reform in
the second half of this year, starting with personal income tax
IRPEF.
In other points, the DEF said that at least 80% of the Italian
population would be vaccinated by the end of October.
"Over half the 40 billion adjustment will be for VAT payers and
businesses," the document added.
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