January 17, 2020 / 2:09 PM / a month ago

Italy's 2019 budget deficit to be lower than expected: central bank

ROME (Reuters) - Italy’s 2019 budget deficit was probably below the government’s official target of 2.2% of gross domestic product and the lowest for more than a decade, the Bank of Italy said on Friday.

National statistics agency ISTAT will publish the 2019 public finance data on March 2.

“The preliminary data available for 2019 indicates a slight fall in the deficit-to-GDP ratio,” the central bank said in its quarterly economic bulletin.

In September, the government of the anti-establishment 5-Star Movement and the centre-left Democratic Party targeted the 2019 deficit at 2.2% of GDP, the same level as in 2018, and set the same goal for this year.

The last time Italy posted a deficit below 2.2% was in 2007.

The public debt, however, rose in 2019 from its 2018 level of 134.8% of GDP, the Bank of Italy said, without giving details.

The government in September targeted the 2019 debt at 135.7% of GDP, projecting it to edge down to 135.2% this year.

Italian gross domestic product growth was “roughly stationary” in the fourth quarter from the previous three months, the bulletin estimated, while confirming its previous 2019 full-year growth forecast of 0.2%, made in December.

If the Q4 forecast is correct it will be the eighth consecutive quarter of stagnation, in which quarter-on-quarter GDP growth has remained within a band of +0.1 and -0.1%. The last four quarters reported have each posted growth of 0.1%.

The bulletin confirmed the bank’s previous forecasts for growth in 2020 and 2021 at 0.5% and 0.9% respectively.

Reporting by Gavin Jones; Editing by Giselda Vagnoni

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