Italy debt below 140% of GDP for 2024: Economy Ministry undersecy

The debt for Italy is not anticipated to exceed 140 per cent of gross domestic product (GDP) in 2024 even after higher than projected spending for home renovation incentives, an undersecretary of the country’s Economy Ministry said.

Ahead of a new set of government economic projections, Economy Ministry undersecretary Federico Freni said incentive schemes for the renovation of buildings or increasing their energy efficiency would cost over $228 billion.

Freni, who was speaking at a business conference organised by The European House Ambrosetti think-tank, said,"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." 

"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 incentives, Italy may be required to revise its 2023 deficit and debt figures which are presently at 7.2 per cent and 137.3 per cent of their GDP, respectively.

Freni said the debt-to-GDP ratio would “certainly not” climb above 140 per cent this year.

Italy's cabinet will convene on April 9 for approving the Economic and Financial Document (DEF) with its most recent forecasts.

The Treasury will anticipate 1 per cent GDP growth in 2024 as per source statements earlier this week.

This slims a prior 1.2 per cent figure which was set in September 2023, which in turn is stacked with a 0.8 per cent expansion forecast by the Bank of Italy on April 5.

The most recent growth forecast also comes above the present 0.7 per cent projection by the European Union, which according to Economic Commissioner Paolo Gentiloni would likely be confirmed in June after the Commission publishes updated projections.

(With Reuters Inputs)