Tags: EU | Italy | Financial | Crisis

IMF Sees Italy Missing Budget Deficit Targets

Tuesday, 17 Apr 2012 04:30 PM

 

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The International Monetary Fund is predicting that Italy will miss its budget deficit targets this year and next and won't balance its budget until at least 2018 — years later than the government's estimates.

In a report Tuesday, the IMF said Italy's deficit will reach 2.4 percent of its economy this year, above its 1.2 percent target. It is forecast to trim it to 1.5 percent of its output next year and 1.1 percent of its economy in 2017, the last year for which the IMF made estimates.

Premier Mario Monti came into office in November promising to balance the budget by 2013, a centerpiece of his efforts to steer Italy out of its debt crisis. And just Tuesday, parliament gave its final approval to a constitutional amendment requiring a balanced budget.

But also Tuesday, Italy revised its own growth and deficit figures, now predicting that it will register a zero deficit only in 2015, according to the text of the government's figures published on the website of Il Sole/24 Ore, Italy's leading financial newspaper.

The government predicted the economy would contract 1.2 percent this year, more than the 0.4 percent previously projected.

The IMF projected the economy would contract 1.9 percent in 2012 — an estimate that the Bank of Italy chief Fabrizio Saccomanni said was "too pessimistic."

IMF chief Christine Lagarde praised the steps Italy had taken so far to rein in its debt and spur growth and suggested further measures wouldn't be necessary.

"We believe that the announced measures are sufficient," Lagarde was quoted as saying by Il Sole's Tuesday editions.

Italy said its level of public debt would reach 123.4 percent of gross domestic product in 2012, up from the current 120 percent, but then would fall in 2013 to 121.6 percent and fall in the years thereafter.

The Italian figures were to be discussed at a Cabinet meeting Wednesday.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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