Italian Finance Minister Daniele Franco said that the country’s economy is expected to expand by at least 5.8 percent in 2021 as the country recovers from the pandemic.
Franco said on Sep. 5 at the annual Ambrosetti Forum that the expected growth will cover the government’s high debt and deficit.
Following expansive stimulus packages in early 2021, Italy’s government debt is expected to reach 160 percent of the country’s GDP — its highest since World War II — while the fiscal deficit may rise to 11 percent.
Franco reaffirmed that the public debt is sustainable and that the government plans to introduce tax cuts in a new fiscal law to help boost Italy’s growth.
The Italian Treasury initially estimated a 4.5 percent growth this year and 4.8 percent in 2022, following a steep 8.9 percent contraction in 2020.
Italy’s economy recovered strongly this year, expanding by 17.3 percent from the 2020 contraction in the second quarter, as vaccination allowed the services sector to reopen and boost the economy.
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