Italy debates budget amid declining GDP

EPA-EFE/ALESSANDRO DI ME

Italian Prime Minister Giuseppe Conte awaits the arrival of President of the Palestinian National Authority Mahmoud Abbas in Rome, December 3, 2018.

Italy debates budget amid declining GDP


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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%.

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