GDP weaker this year than earlier estimates
Treasury to tell cabinet that GDP likely to fall by 1.7% in 201319 September, 20:01
GDP may average a loss of 1.7% this year – worse than previous estimates of a 1.3% drop for 2013 - and expand by only 1% in 2014, according to the latest official estimates prepared for a cabinet meeting on Friday.
That's more pessimistic than forecasts earlier this month from Italian industry federation Confindustria which said it expects Italy's GDP to contract by 1.6% for the year.
The figures were released after financial markets closed, and after warnings from the European Commission that Italy will need to take corrective budget measures if the government finds itself with a deficit-to-GDP ratio of 3.1% - above the 3% threshold allowed by the EU.
On Wednesday Italian government sources said the executive has revised its deficit-to-GDP ratio forecast to 3%-3.1% in its updated economic blueprint, the DEF, which will be presented at Friday's cabinet meeting.
A weaker GDP makes the government's job harder in calculating debt ratios as the smaller the GDP, the larger the debt appears in proportion.