Italy Raises 2013 Deficit Target to 0.5% of GDP From 0.1%

Italy’s government revised its budget-deficit goal next year to 0.5 percent of gross domestic product from a previous target of 0.1 percent, the Cabinet said in an e-mailed statement after a meeting in Rome.

Italy’s economy will shrink 1.2 percent this year before expanding 0.5 percent in 2013, said the Cabinet, which approved the government’s three-year economic plan today. The government had previously forecast a contraction of between 0.4 percent and 0.5 percent this year.

Public debt, net of bailout contributions to Greece and to Europe’s rescue funds, will amount to 120.3 percent of GDP this year, according to the statement.

To contact the reporter on this story: Lorenzo Totaro in Rome at ltotaro@bloomberg.net

To contact the editor responsible for this story: Jeffrey Donovan at jdonovan26@bloomberg.net

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