MILAN (Reuters) – Italy is expected to set an economic growth target for 2025 of 1.3% or 1.4% as part of its medium-term structural budget plan to be submitted to the European Commission by Sept. 20, Italian daily Il Sole 24 Ore reported on Sunday.
Excluding policy changes, Rome expects growth of 1.1% next year, the newspaper added, lower than a projection of 1.2% made in April. The final target is slightly higher than that, however, as Rome plans to approve tax cuts to support the public’s purchasing power and boost domestic demand.
The plan will also provide an updated framework for Italy’s strained public finances.
Italy’s Treasury was not immediately available for comment.
Rome was put under a so-called Excessive Deficit Procedure by the EU this year, and the Treasury’s plan, which is aimed at cutting the fiscal gap in line with EU prescriptions, must also comply with the latest reform of the bloc’s fiscal rules.
The infringement procedure obliges Italy to cut its structural budget deficit net of one-off factors and business cycle fluctuations by 0.5% or 0.6% of GDP per year.
Sources told Reuters late last month that in its medium-term structural budget plan, the government of Prime Minister Giorgia Meloni would stick to a commitment to bring its deficit-to-GDP ratio below the EU’s 3% ceiling in 2026.
Il Sole 24 Ore reported that Italy’s deficit-to-GDP ratio could fall below 4% this year against the expected 4.3% estimate made in April due to a positive trend in tax revenues.
(Reporting by Giuseppe Fonte and Gianluca Semeraro; Editing by Hugh Lawson)