Italy deficit/GDP seen at 1.9% in 2019, 1.6% in 2020 -sources

ROME, Sept 2 (Reuters) - Italy’s budget deficit is seen falling to 1.6% of gross domestic product next year from an estimated 1.9% this year, sources close to the matter told Reuters on Monday.

The projections for both years are lower than previously targeted and give potential room for manoeuvre to a new government being negotiated by the anti-establishment 5-Star Movement and the centre-left Democratic Party (PD).

The estimate for 2020 refers to an unchanged policy scenario and includes an automatic increase in sales tax, which both 5-Star and the PD have promised to scrap before it takes effect. (Reporting by Giuseppe Fonte, Writing by Gavin Jones, Editing by Crispian Balmer)