Italy’s 2019 budget bill will reach the Lower House of the Italian Parliament on December 4 to be debated for the remainder of the week with the Italian government indicating that it is willing to reduce the deficit target to 2% after months of refusing to compromise on its original 2.4% target that was rejected by the European Commission on October 16.
Italy is arguing that an expansionary budget is necessary to bolster a sluggish economy, which is already moving towards negative growth. Italy’s gross domestic product dropped by 0.1% in the third quarter of 2018 from the previous three months, which was the first drop after 14 consecutive quarters of growth;
Italy’s GDP remains 0.7% higher than in the same period in 2017, but the economy is moving in the wrong direction. Unemployment remains the highest among the G7 economies, surging by 0.2% month-on-month in October to 10.6%.