Brussels, 11/04/2016 (Agence Europe) - On Monday 1 April, the European Commission took note of the revision to 1.2% of GDP of the Italian growth forecast for 2016, as laid down in the stability programme adopted by the Italian government at the end of last week.
Under its revised downwards trajectory, growth in Italy is expected to stand at 1.2% of GDP in 2016, 1.4% in 2017 and 1.5% in 2018. The head of the Italian government, Matteo Renzi, described them as “more realistic and more cautious” predictions which will not force the government into subsequent budgetary corrective action, according to reports in the Italian press. After three years of recession, Italy returned to growth in 2015.
Public deficit is expected to stand at 2.3% of GDP in 2016, 1.8% in 2017. A return to balance has been put back a year, from 2018 to 2019. Italian public debt, the highest in relation to GDP in the Eurozone after Greece, will fall, from 132.7% in 2015 to 132.4% in 2016.
As its deficit comes under the preventative plank of the Stability and Growth Pact (below 3% of GDP), the Italian government is negotiating hard with the European Union to be given the opportunity to make use of several of the flexibility clauses laid down in the Pact, to allow it more easily to cover the expenditure related to reforms, investment and hosting refugees on its soil.
On the basis of the spring economic forecasts, which are expected at the end of this month, the Commission will return its assessment of the economic and budgetary situation in Italy and of Italy's requests for budgetary flexibility in May. (Original version in French by Mathieu Bion)