Italy’s Parliament Backs Meloni’s Plan to Widen Deficit

(Bloomberg) -- Italy’s Parliament has approved Giorgia Meloni’s plan to finance its upcoming budget law by widening the country’s deficit.

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Both the Lower House and the Senate voted Wednesday to green light a budget update presented last month, which shows the government plans to bring its deficit below the limit set by the European Union only in 2026 — a year later than previously planned.

Under that plan, the government targets 2023 deficit at 5.3% of gross domestic product, compared with an earlier 4.5%. For 2024, the deficit is seen at 4.3%, compared with 3.7% as targeted in April.

The approval allows Meloni to finance key election promises to voters in its upcoming budget law which is expected to be presented officially Monday.

Just this week, senior Bank of Italy official Sergio Nicoletti Altimari said in a parliamentary hearing that the government’s budget plan was “plausible though slightly optimistic” and suggested that the government exercise “extreme” fiscal prudence to keep its finances in order.

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