MILAN (Reuters) – Italy does not expect its debt to top 140% of gross domestic product (GDP) this year despite higher than forecast spending for home renovation incentives, a junior minister said ahead of a new set of government economic projections.
Speaking on Saturday at a business conference organised by The European House Ambrosetti think-tank, Economy Ministry undersecretary Federico Freni said incentive schemes to renovate buildings or increase their energy efficiency would cost more than 210 billion euros ($228 billion).
“We don’t have the precise number yet but we are definitely above 210 billion euros … that’s how much we’ve spent for building incentive schemes,” he said.
“So we need to carefully plan and monitor public spending because we can’t sweep the debt under a rug,” he added.
Given the higher-than-forecast cost of the incentives, Italy may need to revise up its 2023 deficit and debt figures which currently stand at 7.2% and 137.3% of GDP, respectively.
Asked about whether the debt-to-GDP ratio could climb above 140% this year, Freni said: “Certainly not.”
Italy’s cabinet meets on April 9 to approve the Economic and Financial Document (DEF) with its latest forecasts.
Sources said earlier this week that the Treasury will estimate GDP growth of 1% in 2024, trimming a previous 1.2% figure set in September. That compares with a 0.8% expansion forecast by the Bank of Italy on Friday.
The latest growth forecast is also above the current 0.7% projection by the European Union, which Economic Commissioner Paolo Gentiloni on Friday said would be likely confirmed in June when the Commission publishes updated projections.
($1 = 0.9229 euros)
(Reporting by Valentina Za and Giuseppe Fonte; Editing by Kirsten Donovan)
