By Giada Zampano
ROME (AA) - Italy cut its growth forecast for 2023 to 0.8% from 1% on Wednesday as it drew the framework for next year's budget.
Prime Minister Giorgia Meloni is struggling to meet pledges to cut taxes in the budget as financial markets keep a close eye on Rome's fragile public finances.
Meloni’s Cabinet met during the day to sign off on the new set of economic forecasts, which reflect a string of weak data and growing economic difficulties.
This year’s budget deficit is set at 5.3% of Gross Domestic Product (GDP), up from a previous 4.5%, and falls to 4.3% in 2024, according to the new forecasts.
The deficit will rise largely due to public spending related to bonuses paid to citizens for environmental-friendly home improvements, said the government.
Next year's GDP growth will be at 1.2%, down from April’s forecast of 1.5%.