Italy Q1 budget deficit narrows y/y to 9.0% of GDP

ROME (Reuters) – Italy’s public budget deficit narrowed in the first quarter of this year to 9.0% of gross domestic product, compared with 12.8% in the same period of 2021, official statistics agency ISTAT said on Tuesday.

The narrowing of the deficit was due to a large rise in revenues, up 10.1%, which oustripped a 2.0% increase in government spending.

Italy is currently targeting the full-year 2022 deficit 5.6% of GDP, down from 7.2% last year.

Mario Draghi’s government has budgeted more than 30 billion euros ($31.12 billion) this year to cap energy bills and prop up the economy, while avoiding hiking the deficit target set last September.

The extra spending is to be funded by savings elsewhere in the state budget and by hiking taxes on energy companies making handsome profits thanks to surging prices.

ISTAT gave the following quarterly public finance data.

All data are expressed as a percent of gross domestic product.

Public balance Revenues Spending Primary Balance*

Q1 2022 -9.0 43.0 52.0 -5.2

Q1 2021 -12.8 41.9 54.6 -9.4

*Public balance net of debt servicing costs.

(Reporting by Gavin Jones, gavin.jones@reuters

($1 = 0.9641 euros)

(Reporting By Gavin Jones)