Italy’s New Budget Law Offers Only Modest Growth Boost

Italy’s recently-approved budget law for 2024 leaves a lot to be desired, according to research by Bloomberg Economics. The plan largely consists of temporary tax cuts and increased spending worth around €24 billion ($25.4 billion) — approximately 1.2% of GDP — and those measures will only offer a modest boost to growth next year, with no lasting benefits. Not only does the package worsen public finances, but the lack of ambition to reduce the debt burden raises uncertainty at a time when borrowing costs are climbing. Investors will keep a close eye on Italy as it faces a series of credit-rating reviews over the coming weeks.