AlHijjah 04, 1436, September 18, 2015, SPA -- The Italian economy should expand by 0.9 per cent this year and by 1.6 per cent in the next, the government of Prime Minister Matteo Renzi said Friday, raising growth forecasts issued five months ago, according to dpa. Renzi had announced plans to revise the figures in a TV appearance Monday. In April, the government's economic outlook document was banking on an 0.7-per-cent uptick in 2015 followed by 1.4-per-cent rise in 2016. "Today many indicators show that Italy has restarted, and the [growth forecasts] simply take stock of that," the premier, whose country was stuck in a record-length recession during 2011-14, said after chairing a cabinet meeting in Rome. A healthier economy - lifted by low interest rates by the European Central Bank, a weak euro and low energy prices - will make it easier for the government to square public accounts. A draft budget law is due to be presented to parliament by October 15. Economy Minister Pier Carlo Padoan said the government was planning to adopt a budget deficit target of 2.2 per cent of gross domestic product (GDP) next year, and would ask European Union permission to go as far as 2.4 per cent to meet expenses due to the migration crisis. In April, Rome authorities had forecast a deficit of only 1.8 per cent of GDP for next year. More leeway on the budget shortfall - making use of "flexibility" clauses in EU austerity rules whilst respecting the benchmark EU deficit limit of 3 per cent - would help the government meet crowdpleasing pledges to cut taxes. EU Economy Commissioner Pierre Moscovici, who met Padoan before the Italian cabinet meeting, was non committal on the issue. "Italy needs to respect the rules like the others, also applying the flexibility foreseen by the treaties," he said.
