Italy needs to get tougher on debt, deficit: IMF’s Georgieva

ITALY should be taking tougher action to deal with its deficit and debt levels, the head of the International Monetary Fund (IMF) said in an interview published online on Thursday.

“We think that what is now in the budget for Italy should be strengthened,” IMF managing director Kristalina Georgieva was quoted as saying by Italy’s Corriere della Sera newspaper.

“The fiscal adjustment Italy is taking is not going to work fast enough to bring deficits and debt levels down,” she added in comments published in English after an interview with a number of European newspapers.

Italy’s government last month approved a budget for next year with measures worth around 24 billion euros (S$35.4 billion) in tax cuts and increased spending, despite market concerns over the country’s strained public finances.

Italy is projected to have a budget deficit next year of 4.3 per cent of gross domestic product. The budget is currently making its way through parliament.

The European Commission forecast last week that Italy’s debt, proportionally the second highest in the euro zone, would rise marginally from a projected 140 per cent of national output this year to 141 per cent in 2025. REUTERS