ROME (Reuters) – The International Monetary Fund wants Italy to make its 2024 budget framework more stringent, as tax cut plans made the Fund “a bit worried”, its chief economist, Pierre-Olivier Gourinchas, said in a newspaper interview on Thursday.
Rome outlined a fiscal framework last month that hiked next year’s deficit goal to 4.3% of gross domestic product (GDP) from 3.7%, and targeted its return below the European Union’s ceiling of 3% only in 2026, reducing virtually no debt over the period.
Gourinchas told the Corriere della Sera daily that Italy’s structural deficit, net of interest spending, was not seen as falling fast enough.
The IMF was “a bit worried” by planned tax cuts that “don’t necessarily seem to go in the right direction”, he added.
It would be “desirable” if Prime Minister Giorgia Meloni’s government revised its fiscal plans to make them more stringent before they are approved by parliament, he said.
Over the next month Italy’s budget faces scrutiny from credit ratings agencies, with S&P Global, DBRS, Fitch and Moody’s (NYSE:) all reviewing their assessment of the euro zone’s third largest economy.
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