The Italian deficit at 7.4% in 2023. Giorgetti: ‘It does not affect the Def’

#Italian #deficit #Giorgetti #affect #Def

Italy ended 2023 with a deficit equal to 7.4% of GDP. This was announced by Istat, specifying that compared to the accounts of last April 5, the new version sees a worsening of net debt in relation to GDP by 0.2 percentage points (it was 7.2%). 2022 closed at 8.6%. This is the highest deficit in the entire EUfollowed by Hungary (6.7%) and Romania (6.6%), according to what emerges from the latest Eurostat data. Italy’s public debt fell to 137.3% of GDP at the end of the fourth quarter of last year, compared to 137.9% in the third quarter and 140.5% in 2022. In the Eurozone, the deficit/GDP ratio average in 2023 fell to 3.6%, from 3.7% the previous year, while in the EU it rose from 3.4% to 3.5%. Public debt decreased from 90.8% to 88.6% in the Eurozone and from 83.4% to 81.7% in the EU.

THE LIVE

The revision of the 2023 deficit to 7.4% by Istat, compared to the previous 7.2%, “does not affect the forecasts contained in the Def, as they are already discounted in the profile of the level of debt as a percentage of GDP”. The Minister of Economy Giancarlo Giorgetti said this during a hearing on the Def.

The updating of the programmatic framework of the Def, consistent with the new rules of European economic governance, “will be illustrated in the Plan prepared by the summer, which Parliament will have the opportunity to examine and approve before sending it to the European authorities” said the Minister of Economy. “In outlining the trend macroeconomic framework of the Italian economy of the Def, the government had to take into account the possible repercussions of the complex geopolitical context, basing the forecasts on principles of caution and prudence”. Giorgetti explained that the update of the growth estimates “did not consider more favorable projections”, while “it was decided to consider the economic impact of the ongoing conflicts, such as the one in Ukraine, as well as the growing tensions and risks of escalation in the Middle East.”

.”The uncertainty and volatility that have long characterized the international scenario show no signs of abating. The geopolitical tensions that are accumulating pose, in fact, high risks for medium-term growth prospects.” This was said by the Minister of Economy Giancarlo Giorgetti in a hearing at the joint Budget commissions of the Chamber and Senate on the Def. “In this context, any forecasting exercise, however accurate and based on hypotheses based on the utmost caution, could therefore be overtaken by events.”

“The adjustment is fully within our reach. The reduction of the ratio between public debt and GDP in the medium term is a fundamental objective, which must be achieved in order to allow Italy to continue producing wealth in a context that allows, at the same time, to safeguard social inclusion”. This was said by the Minister of Economy Giancarlo Giorgetti in a hearing at the joint Budget commissions of the Chamber and Senate on the Def.

“The European system is changing and tomorrow the new European economic governance will presumably be approved by the European Parliament in plenary”. Economy Minister Giancarlo Giorgetti said this at a hearing on the Def. “Italy has accepted the compromise represented by the new rules – as you know it was not the initial hypothesis of our executive and frankly I do not expect the favorable vote of all the Italian political forces represented in the European Parliament, but I hope that the results obtained from our country can be taken into account by the aforementioned forces during the evaluation and approval”.

Upb: ‘EU procedure for excessive deficit is very likely’

The “non-temporary” exceeding of the 3% threshold in the deficit-GDP ratio makes the initiation of an excessive deficit procedure against Italy “very probable”. The UPB underlines this in the hearing on the Def. The correction path, explains the Parliamentary Budget Office, will have to take into account the agreement on the new European governance which provides for a reduction in the overall structural balance of at least 0.5 percentage points of GDP per year: “on the one hand, thanks to the regime transitional, in the three-year period 2025-27 the adjustment will not consider the increased costs linked to the increase in interest expenditure; on the other hand, the correction path must be consistent with the plausible debt reduction path in the medium term and guarantee that, once the procedure has been exited, the numerical debt reduction safeguard is respected in the remaining years of the adjustment period: this could lead to adjustments greater than 0.5 percentage points for Italy”.

Read the full article on ANSA.it