Italy's Senate approves 2024 budget despite growth concerns
Italy's upper house of parliament on Friday approved the country's budget for 2024 despite widespread concern that the planned measures will do little to boost financial growth.
Prime Minister Giorgia Meloni has described the budget as "realistic" for a country hit hard by the coronavirus pandemic and rampant inflation.
But critics have slammed the measures – worth around 24 billion euros ($25.3 billion) in tax cuts and increased spending – as underwhelming.
"It's a small budget because essentially there were no resources," said analyst Wolfango Piccoli from political risk consultancy Teneo.
"There is nothing for investment (and) it's not a budget for growth," he said.
The money is largely aimed at supporting households, workers and businesses, including income tax cuts for salaries up to 35,000 euros which will only last through 2024.
Around five billion euros have been earmarked for salary increases in the public sector, whereas three billion euros will go to the national healthcare system.
READ ALSO: How will Italy's 2024 budget affect your finances?
Carlo Bonomi, the head of Italy's business lobby group Confindustria, slammed the "substantial absence of support for private investment and a strategy aimed at growth and competitiveness".
Analysts have voiced concern that the budget is based on government growth projections which are much more optimistic than those of official institutions, from the European Commission to the International Monetary Fund and the European Central Bank.
Rome is expecting the economy to expand by 0.8 percent this year and 1.2 percent next year.
Italy's National Statistics Agency has forecast growth of just 0.7 percent for both years. The central bank has a similar projection for this year but sees a 0.6 percent expansion next year.
The government says it will raise some 21 billion euros between 2024 and 2026 through privatisations to help reduce the public debt, valued at 144 percent of GDP – the highest ratio in the eurozone after Greece.
It has also included a spending review in the budget.
"They have tried to create a bit more room for manoeuvre by putting forward this idea of privatisation", but it is a "largely unrealistic" goal in light of Italy's past record on privatisation, Piccoli said.
And Rome's spending reviews "never yield any significant amount of money", he added.
The budget now goes to the lower house of parliament, which will vote at the end of next week. It is expected to be approved quickly, as the parties in Meloni's ruling coalition have a comfortable majority.
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Prime Minister Giorgia Meloni has described the budget as "realistic" for a country hit hard by the coronavirus pandemic and rampant inflation.
But critics have slammed the measures – worth around 24 billion euros ($25.3 billion) in tax cuts and increased spending – as underwhelming.
"It's a small budget because essentially there were no resources," said analyst Wolfango Piccoli from political risk consultancy Teneo.
"There is nothing for investment (and) it's not a budget for growth," he said.
The money is largely aimed at supporting households, workers and businesses, including income tax cuts for salaries up to 35,000 euros which will only last through 2024.
Around five billion euros have been earmarked for salary increases in the public sector, whereas three billion euros will go to the national healthcare system.
READ ALSO: How will Italy's 2024 budget affect your finances?
Carlo Bonomi, the head of Italy's business lobby group Confindustria, slammed the "substantial absence of support for private investment and a strategy aimed at growth and competitiveness".
Analysts have voiced concern that the budget is based on government growth projections which are much more optimistic than those of official institutions, from the European Commission to the International Monetary Fund and the European Central Bank.
Rome is expecting the economy to expand by 0.8 percent this year and 1.2 percent next year.
Italy's National Statistics Agency has forecast growth of just 0.7 percent for both years. The central bank has a similar projection for this year but sees a 0.6 percent expansion next year.
The government says it will raise some 21 billion euros between 2024 and 2026 through privatisations to help reduce the public debt, valued at 144 percent of GDP – the highest ratio in the eurozone after Greece.
It has also included a spending review in the budget.
"They have tried to create a bit more room for manoeuvre by putting forward this idea of privatisation", but it is a "largely unrealistic" goal in light of Italy's past record on privatisation, Piccoli said.
And Rome's spending reviews "never yield any significant amount of money", he added.
The budget now goes to the lower house of parliament, which will vote at the end of next week. It is expected to be approved quickly, as the parties in Meloni's ruling coalition have a comfortable majority.
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