Italy Forecasts Higher Budget Deficit for 2017

The Italian government has approved a budget for the coming year that forecasts a deficit of 2.3% of gross domestic product (GDP) instead of a previously forecast 2.0%. "It is still not going well for Italy, but after two and a half years it's better than before," said Prime Minister Matteo Renzi while presenting the budget, the (dpa) reported. "We are not satisfied; we are hungry for positive results," Renzi said, as he presented the budget which anticipates 2017 growth of only 1%.

    The European Commission, which must now vet the budget, will likely be critical of Renzi's plans, but the Italian premier is requesting flexibility in consideration of the costs the country is enduring which among others include the refugee crisis and rebuilding following a massive August earthquake in central Italy.

    The Italian government is shying away from unpopular austerity measures in the run-up to an important constitutional referendum in December, to which the government has tied its political future. At the beginning of 2016, Italy had agreed to a deficit of 1.8%.