August 11, 2014 / 9:55 AM / 3 years ago

Italy's Renzi sees 2014 deficit at 2.9 pct/GDP-FT

ROME, Aug 11 (Reuters) - Italy will post a budget deficit of 2.9 percent of gross domestic product in 2014 without the need for additional fiscal tightening, Prime Minister Matteo Renzi said in an interview published on Monday.

Renzi told the Financial Times that Italy would not breach the European Union’s deficit limit of 3 percent of GDP despite the fact that the economy fell back into recession after contracting 0.2 percent in the second quarter of the year.

“I have absolutely no intention of breaking the 3 per cent ceiling. We hope to have better (growth) figures in the second half and as a result will be at 2.9 per cent (of GDP),” he told the newspaper.

Renzi and Economy Minister Pier Carlo Padoan have repeatedly said that Italy would respect the EU’s deficit limits without the need for a supplementary budget but they have not given a specific new forecast.

Italy’s current deficit forecast for 2014 issued in April is 2.6 percent. But the target, as well as the official growth estimate of 0.8 percent, is expected to be revised when the government presents its new financial planning document in September. (Reporting by James Mackenzie; Editing by Andrew Heavens)

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