On 6 July, the Italian government approved further budget cuts of EUR 26 billion over the next three years. The Monti administration hopes to restore confidence in the sustainability of the country's finances, amid fears that Italy could be forced to request a bailout from its Euro area peers in the coming months. The bill includes, among other measures, a reduction in the number of provincial governments, which will be cut by half. In addition, the number of public sector workers will be reduced by 10% and the number of state managers cut by 20%. Although the impact of the budget cuts is to be spread over the next three years, the bulk of the reductions are planned for 2013 (EUR 10.5 billion) and 2014 (EUR 11.0 billion). The package also postpones the VAT increase previously envisaged for October, which will be now delayed until July next year. Despite the additional fiscal consolidation efforts, the spread between Italian and German 10-year bonds continued to widen during the month, reaching 543 points on 24 July, the highest risk premium since Monti took office in November last year. In spite of the austerity measures, on 13 July, the international credit rating agency Moody's downgraded Italy's sovereign rating by two notches, to Baa2 from A3, citing contagion risks from Greece and Spain, as well as a deteriorating economic outlook. Later in the month, on 27 July, Moody's also cut the rating for the southern region of Sicily to Baa3 from Baa2, just one level above junk status, while warning of the possibility of further downgrades going forward. A few days earlier, Prime Minister Monti had announced an austerity plan for the region aimed at restoring financial stability and reducing the risk of insolvency on Sicily's EUR 5.3 billion debt. The program will be closely monitored by the government and will focus on downsizing the traditionally-overstaffed public sector payroll.
Monti government unveils further budget cuts amid rating downgrade
July 30, 2012
Looking for forecasts related to Fiscal in Italy? Download a sample report now.
Italy Fiscal Chart
Italy Economic News
October 14, 2016
According to revised data released by the Italian Statistical Institute (ISTAT), consumer prices fell 0.2% from the previous month in September.
October 10, 2016
In August, industrial output increased 1.7% from the previous month, accelerating from July’s revised 0.7% increase (previously reported: +0.4% month-on-month).
October 3, 2016
The IHS Markit manufacturing Purchasing Managers’ Index (PMI) rose from 49.8 in August to 51.0 in September, taking it above the 50-threshold that separates expansion from contraction in the manufacturing sector. September’s result mainly reflected a return to growth in new orders, which, in the previous month, had dropped slightly for the first time in over one-and-a-half years.
September 30, 2016
According to provisional data released by the Italian Statistical Institute (ISTAT), consumer prices fell 0.2% over the previous month in September, contrasting August’s 0.2% increase and marking the lowest result in seven months.
September 28, 2016
The National Institute of Statistics’ (Istat) composite business confidence indicator (IESE, Istat Economic Sentiment Indicator), which covers the manufacturing, construction, service and retail sectors, increased from a revised 99.5 in August (previously reported: 99.4) to 101.0 in September. All four categories of the indicator improved compared to August.