Italy posts firm growth in 2022, but budget deficit overshoots

ROME, March 1 (Reuters) - Italy posted firm economic growth of 3.7% last year but the budget deficit exceeded official forecasts, national statistics bureau ISTAT reported on Wednesday. Growth slowed from 7.0% (upwardly revised from 6.7%) in 2021 but it was in line with the government's most recent projection, as the euro zone's third largest economy held up better than expected during the first three quarters. The picture for public finances was less positive, with the budget deficit overshooting Rome's target in 2022 due to a recent ruling by the European Union's statistics agency Eurostat regarding the way tax credits are classified in state accounts. The deficits for the previous two years were also revised up. Last year's fiscal gap was reported at 8.0% of gross domestic product, compared with an official target of 5.6% set in November. The deficits in 2021 and 2020 were revised respectively to 9.0% from 7.2% and to 9.7% from 9.5%. The public debt - proportionally the highest in the euro zone after Greece's - fell to 144.7% of GDP in 2022 against a government target of 145.7%.

The 2022 level was down from a downwardly revised 149.8% in 2021. Looking ahead, Giorgia Meloni's government forecasts economic growth will slow sharply this year to just 0.6%, after it lost momentum during 2022. In the fourth quarter GDP contracted by 0.1% from the previous three months, according to ISTAT's preliminary reading issued at the end of January.

ISTAT gave the following data on Italy's GDP, the budget deficit, the public debt and other details of public accounts.

2022 2021 2020 GDP 3.7 7.0r -9.0 Deficit/GDP 8.0 9.0r 9.7r Debt/GDP 144.7 149.8r 154.9 Primary balance/GDP** -3.7 -5.5r -6.2r Taxes/GDP 43.5 43.4 42.7
**public balance excluding debt servicing costs

(Reporting by Antonella Cinelli, Valentina Consiglio, editing by Raissa Kasolowsky)

Reuters

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Italy posts firm growth in 2022, but budget deficit overshoots

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