The populist government will press ahead with plans to triple deficit in 2019 to propel Italy's social and economic development, prime minister Giuseppe Conte said Tuesday during a visit to the University of Florence.
"We are determined and have throught through this budget very carefully - this is our line of action," said Conte, ahead of an inaugural address to mark the start of the law faculty's academic year.
"We need to allow our economy to reach its potential and we clearly also need to think of Italy's social development," added Conte, who is a law professor with no political affiliation.
Conte also said he believed that Italy's growth will exceed the latest forecast by the International Monetary Fund, which on Tuesday cut its global economic growth outlook for this year and next.
"We are confident that growth will certainly be higher," Conte said, pointing out that the government planned to lower the deficit to 1.8 percent by 2021 and also to bring down the debt to GDP ratio.
The World Economic Outlook report lowered the IMF's growth forecast for Italy this year by 0.3 percent to 1.2 percent and predicted it will slow next year to 1.0 percent due to "the weakening of external and internal demand and uncertainty surrounding the new government's programme".
Italy's difficulties earlier this year in forming a government after the inconclusive 4 April national elections and the threat to the sustainability of Italy's debt posed by the government's plan to reverse previous pension and labour reforms have caused the spread between Italy and Germany's 10-year bond yields to widen since June, said the IMF.
The World Economic Outlook urged Italy to carry out further reforms and leave existing ones in place and also said fiscal policies must be put in place that will reassure financial markets.
