ROME: Italy’s government approved on Monday a low-key 2018 budget which includes measures to raise youth employment, tackle poverty and encourage investments ahead of an election in the spring.
The financial package aims to lower the budget deficit to 1.6 percent of gross domestic product (GDP) from a targeted 2.1 percent this year, while avoiding painful pre-election belt-tightening measures.
Prime Minister Paolo Gentiloni’s task has been made easier by stronger-than-expected economic growth and low interest rates which reduce the cost of servicing Italy’s huge public debt — the highest in the euro zone after Greece’s.
“The budget certifies that the Italian economy is at a turning point and it contains resources aimed to reinforce the turnaround,” Economy Minister Pier Carlo Padoan told reporters.
The package will now be sent to the European Commission for review and at the same time begin its passage through parliament, where it must be approved by the end of the year. It is likely to be one of the last pieces of legislation passed by parliament before the president dissolves the upper and lower houses and calls the election.
Last month the government increased its GDP growth forecast for this year to 1.5 percent from 1.1 percent, and hiked next year’s outlook to 1.5 percent from 1.0 percent. The debt-to-GDP ratio is targeted to edge down in 2018 to 130.0 percent from a targeted 131.6 percent this year.
