11/8/2018, 12:41 PM (Source: TeleTrader)
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EU claims Italy's deficit to surpass 3% limit in 2020

In its semiannual projections, the European Commission said Italy's economic growth would come in at 1.1% this year or 0.4 percentage points down from its previous forecast. The country's government set a target of 1.5% for 2019, claiming expansion would be underpinned by the controversial rise in spending, but the European Union's executive arm left the expected rate at 1.2%. The report showed the administration in Brussels counts on budget deficit of 2.9% of gross domestic product next year, while that it is seen reaching 3.1% in 2020, which means the threshold of 3% would be breached.

The EU said Italy's growth outlook still faces "high uncertainty and intensified downside risk," highlighting the recent spike in yields on sovereign debt and the risk that public expenditure drives away corporate investment. The rise in GDP is expected to accelerate to 1.3% in 2020.

Pierre Moscovici (pictured), commissioner for economic and financial affairs, taxation and customs, said the 28-member bloc's rules must be respected. He said the EU is committed to "flexibility" but not "compromise" and called for dialogue. Meanwhile, media reports indicated the cabinet led by Prime Minister Giuseppe Conte wouldn't amend the budget plan for now.

Breaking the News / IT