The government aims to make adjustments to the gross domestic product to limit the increase in the deficit in 2023

ROME (Reuters) – The government expects upcoming revisions to annual gross domestic product estimates for 2020-2022 to limit the expected increase in net debt this year, according to sources familiar with the matter.

Sources say Istat will present updated data on September 22 and the Treasury expects significant changes that will also have a positive impact on public finances this year.

The Italian government’s current deficit targets date back to April and stand at 4.5% of GDP in 2023 and 3.7% in 2024. However, both targets are at high risk of being exceeded due to audits linked to tax incentives on building renovations, such as Superbonus or bonus Interface.

Italy has already revised its deficit upward over the past three years due to the new tax credit system introduced by Eurostat at the beginning of 2023.

After the new accounting framework, the 2022 debt became equal to 8%, compared to the target of 5.6%.

Eurostat is scheduled to decide soon on a new round of tax breaks linked to construction incentives, which according to some sources would translate into a deficit in 2023 exceeding 4.5% of GDP.

However, ISTAT revisions could limit this increase.

The Statistical Institute expected an upward revision of between 1.8 and 2.1% for GDP in 2021, calculated in nominal terms. Sources say the Treasury is confident of a significant increase in real growth in 2021 and 2022, with positive implications for 2023 as well.

(Translated by Enrico Chiacovelli, Edited by Stefano Bernabei)