(Reuters) - Italy would be justified in delaying its balanced budget target by a year if the resources freed up were used to help stimulate growth, a senior Bank of Italy official said on Monday.
The comment comes ahead of the government's 2015 budget which will delay a promised target of achieving a balanced budget in structural terms, adjusted for the swings of the business cycle, until 2017, a year later than promised.
In a statement to the parliamentary budget committee, Bank of Italy deputy director general Luigi Signorini said delaying the process of balancing the budget would increase Italy's already huge public debt in the short term.
"That is justified if the margins for maneuver are used effectively to relaunch growth and to increase the development potential of the economy in the medium-to-long term," he said.
The government says the economic slump which has left Italy in its third recession in six years constitutes exceptional circumstances which justify setting aside budget commitments made to its European Union partners earlier this year.
Signorini said it was important that the government acted "rapidly and decisively" to accelerate its privatization program, which foresees average annual divestments equivalent to 0.7 percent of gross domestic product over three years.
reuters.com
The comment comes ahead of the government's 2015 budget which will delay a promised target of achieving a balanced budget in structural terms, adjusted for the swings of the business cycle, until 2017, a year later than promised.
In a statement to the parliamentary budget committee, Bank of Italy deputy director general Luigi Signorini said delaying the process of balancing the budget would increase Italy's already huge public debt in the short term.
"That is justified if the margins for maneuver are used effectively to relaunch growth and to increase the development potential of the economy in the medium-to-long term," he said.
The government says the economic slump which has left Italy in its third recession in six years constitutes exceptional circumstances which justify setting aside budget commitments made to its European Union partners earlier this year.
Signorini said it was important that the government acted "rapidly and decisively" to accelerate its privatization program, which foresees average annual divestments equivalent to 0.7 percent of gross domestic product over three years.
reuters.com
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