Italy sees 2024 debt below 140% of GDP

Italy does not expect its debt to top 140% of gross domestic product (GDP) this year despite higher than forecast spending for home renovation incentives, a junior minister said ahead of a new set of government economic projections.

Speaking on Saturday at a business conference organised by The European House Ambrosetti think-tank, Economy Ministry undersecretary Federico Freni said incentive schemes to renovate buildings or increase their energy efficiency would cost more than 210 billion euros ($228 billion).

“We don’t have the precise number yet but we are definitely above 210 billion euros... that’s how much we’ve spent for building incentive schemes,” he said.

“So we need to carefully plan and monitor public spending because we can’t sweep the debt under a rug,” he added.

Given the higher-than-forecast cost of the incentives, Italy may need to revise up its 2023 deficit and debt figures which currently stand at 7.2% and 137.3% of GDP, respectively.

Asked about whether the debt-to-GDP ratio could climb above 140% this year, Freni said: “Certainly not.” Italy’s cabinet meets on April 9 to approve the Economic and Financial Document (DEF) with its latest forecasts.

Sources said earlier this week that the Treasury will estimate GDP growth of 1% in 2024, trimming a previous 1.2% figure set in September. That compares with a 0.8% expansion forecast by the Bank of Italy on Friday.