The Italian government is finalizing the update of the 2020 macroeconomic projections, anticipating a 9% drop in Gross Domestic Product (GDP) and an increase in public debt to between 158% and 159%.
The update of the macroeconomic framework, which will serve as the basis for the preparation of the State Budget and the reform plan to be covered in the European Recovery Fund, should be presented to parliament on the 27th and, according to Italian media, will contain changes from calculations made in April.
The transalpine executive is considering a 9% drop in the economy in 2020, a revision up from 8% estimated in April; the same is true in relation to the increase in public debt to figures between 158 and 159% of GDP, after a scenario of 155,7% was anticipated at the beginning of the second quarter of this year.
However, the picture may even be more negative for the country's situation, with Economy Minister Roberto Gualtieri assuming in recent weeks that the deficit could jump to around 11%, as a result of the successive financial stimulus packages approved Rome to face the crisis caused by the covid-19 pandemic.
After the presentation of the 2020 forecasts, the Budget is drawn up and the reform plan to be sent to the European Commission by the end of October, in order to receive in the first half of next year about 10% of the more than 200 billion euros that Italy can use in the European Recovery Fund, with a total of 750 billion euros.
The government led by Giuseppe Conte is preparing a budget plan that will include interventions worth 25 to 30 billion euros, half of which will come from European funds.
Italy was one of the countries most affected by the covid-19 pandemic, as it was the first European nation to become the focus of the spread of the disease caused by the new coronavirus. According to the most recent data, Italy continues to be the second country with the most deaths (35.668), after the United Kingdom, and the fourth with more cases (about 295 thousand), behind only Spain, France and the United Kingdom .