Italy Posted a Deficit of 5.2% of GDP in Q4

The Italian National Institute of Statistics said that Italy’s budget balance has shifted to recording a deficit of 5.2% of GDP in the Q4 of last year, compared to a surplus of 1.9% in the same period of 2019.

The institute stated that over the whole year, the deficit recorded 9.5% of GDP, confirming data for the full year of 2020 issued last month. This comes compared to only 1.6% in 2019 before the Covid-19 pandemic hit the country.

The institute said the deterioration of public balances the Q4 was due to a jump in government spending and lower revenues linked to the pandemic.

This year, official estimates of Rome expect the deficit to drop slightly to 8.8% of GDP, but government sources say this will be revised upwards this month to take into account additional spending to support the economy affected by existing restrictions to combat the spread of the Coronavirus.