Italy to unveil tax-cutting 2024 budget amid debt worries
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Italy’s deficit-hiking 2024 budget due to be approved by cabinet on Monday will cut taxes for workers and increase benefits for large families, officials said, amid growing market concerns over the country’s strained public finances.
Giorgia Meloni’s government is meeting this morning to discuss and approve the budget along with separate financial decrees. The budget bill will then go to parliament, which must pass it by the end of the year.
It will drive up next year’s budget deficit to 4.3% of gross domestic product from 3.6% under current trends, according to the Treasury, due to 15.7 billion euros ($16.54 billion) of extra borrowing mainly devoted to funding tax cuts.
Additional spending of 7-9 billion euros will go on pensions, the health service and public sector contracts, to be funded through alternative savings or tax hikes, two officials said, bringing the total budget package to 23-25 billion euros.
Investors have been demanding a higher premium to hold Italian government bonds since Rome last month raised its budget deficit targets for the 2023-2025 period, setting it up for a possible clash with the European Commission.
