31 May 2001, 13:30 Bank of Italy's Fazio sees 2001 public deficit above 1 pct of GDP
ROME (AFX) - Bank of Italy governor Antonio Fazio forecast that the
public deficit will be above 1 pct of GDP this year, the target fixed
by the government.
In a speech at the bank's annual general meeting, Fazio said that
in the first five months of the year the deficit for the central
government stands at 74 trln lire compared with 50.6 trln a year
earlier.
The widening of the deficit can be compensated by an immediate
reduction in spending, he said, adding however that balancing of the
public accounts has to be achieved through long-term action such as
reform of the pension and welfare system, control over local government
budgets and more efficiency in the public sector.
Fazio also forecast that GDP growth this year will reach 2.4 pct in
the best case scenario.
Fazio added that consumer prices are expected to rise 2.8 pct this
year and about 2.0 pct in 2002.
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