Italy considers €24bn package to help economy

Italy considers €24bn package to help economy
For the healthcare system, Italian Economy Minister Roberto Gualtieri expects the new package will provide an extra €3 billion overall. (AFP)
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Updated 11 January 2021

Italy considers €24bn package to help economy

Italy considers €24bn package to help economy
  • The package will help lift country’s deficit to GDP ratio above the current 7% target

MILAN: Italy is considering a new stimulus package worth €24 billion ($29 billion) to support its healthcare system and its COVID-battered economy, Economy Minister Roberto Gualtieri said in a newspaper interview on Sunday.

“We’re considering a package worth 1.5 percent of our gross domestic product,” Gualtieri told Il Corriere della Sera daily newspaper, confirming that amounted to about €24 billion.

That exceeds previous expectations for a stimulus package worth €20 billion. Italy is set to receive more than €200 billion from the EU’s €750 billion recovery fund.

“About €1.5 billion will be used to buy, distribute and carry out vaccinations. For the healthcare system we expect the new package will provide an extra €3 billion overall,” Gualtieri said.

He said money would be also used to refinance support measures for local governments, furlough schemes and grants to businesses shut following restrictions imposed by Rome to curb the COVID-19 pandemic.

He said this new package and a possible downward revision of growth estimates would lift Italy’s deficit to GDP ratio this year above the current official 7 percent target, but that at the moment there was “absolutely no reason” to forecast a double-digit deficit ratio.

Gualtieri said that, despite recent restrictions, he thought the Italian economy had closed last year not far from a government official estimate of a 9 percent contraction. But he said there were “downside risks” on a projected 6 percent rebound this year.

“Much of it will depend on our ability to promptly start additional investments envisaged by the (European) recovery plan for 2021,” he said.

Italy has registered more than 78,000 COVID-19 deaths since Feb. 21, the second-highest toll in Europe and the sixth highest in the world. The country has also reported 2.26 million cases to date.