Italy's budget deficit will reach
7.5% of GDP in 2021, down from 10.9% in 2020, the International
Monetary Fund said Thursday.
It public debt will rise to 159.7% of GDP, from 157.5% last
year, the IMF said.
"Italian public debt is sustainable, supported by low interest
rates and a forecast recovery in growth," said Vitor Gaspar, who
is responsible for the IMF's Fiscal Monitor.
Gaspar added that "it is essential" that Italy use the over 200
billion euros it is set to get from the EU's COVID Recovery Fund
"to fund high-quality projects that boost growth prospects,
facilitate a transition towards a green and digital future and
accelerate the reduction of the debt".
Italy is set to get the largest single chunk of the 750 billion
Recovery Fund, 209 billion.
Other EU monies will push total funding up to 223 billion.
A row over Italy's Recovery Plan, to use the funds, was cited by
small centrist party Italia Viva (IV) as the main reason it
recently brought down the Italian government.
President Sergio Mattarella is consulting political leaders on a
way out of the crisis, with outgoing premier Giuseppe Conte or
someone else possibly leading a new executive and a snap
election favouring the centre-right opposition seen as unlikely.
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