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The country's economy has been severely hit by the pandemic and its GDP fell by 8.9 percent in 2020.
Italy’s Prime Minister Mario Draghi on Thursday passed additional borrowing worth 40 billion euros to finance a new package of measures to help businesses and households hit by the coronavirus pandemic.
The package was signed off separately in a cabinet meeting early afternoon, along with the Economic and Financial Document (DEF) 2021, the spending plan outlining the country's public finance and economic strategies in the mid-term.
The new stimulus will push the country's budget deficit target to 11.8 percent of gross domestic product (GDP) this year from a previous 8.8 percent projected, and the public debt to 159.8 percent.
The move was in line with the recommendations of the International Monetary Fund (IMF), which on Wednesday called on Eurozone countries to boost their spending to help their economies cope with the effects of the lockdowns and other restrictions.
The measures will be detailed in a decree later this month, yet they should include unemployment benefits and income support for workers and households, plus a new tax relief for young couples taking out a mortgage to buy their first home.
This is the COVID case rate over the last 7 days in European countries.
From very low rates in Iceland and the UK to high rates in Cyprus and Sweden.
Like all other EU countries, Italy will have to submit its recovery plan to Brussels by the end of April to receive its allotted portion (209 billion euros) of a 750-billion-euro fund provided by the Next Generation EU program.
The DEF also showed growth projections at 4.5 percent this year, at 4.8 percent in 2022, and 2.6 percent and 1.8 percent in 2023 and 2024, respectively. However, in a worst-case scenario in which the coronavirus vaccination campaign had a limited impact, the Italian government also included a lower growth forecast for this year (2.7 percent).
As for the deficit/GDP ratio, it should drop from 11.8 in 2021 to 5.9 percent in 2022, 4.3 percent in 2023, and 3.4 percent in 2024, falling again under 3 percent -- a threshold the EU asks member states to respect in normal circumstances -- only in 2025.
The economic and financial plan will now go to the Parliament, where it has to be approved by the Lower House and the Senate before the end of the month. The Italian economy has been severely hit by the pandemic, and its GDP fell by 8.9 percent last year.
#FromTheSouth News Bits | The Italian-Russian Chamber of Commerce announced that Italy will be the first country in the European Union to start producing the Russian vaccine Sputnik V at the beginning of July. pic.twitter.com/DfroaELv0K