Italy aims to lift 2019 deficit/GDP target to around 1.4% - sources

Italy's new government plans to raise its deficit target for 2019 to around 1.4 per cent of economic output against a goal of 0.8 per cent drawn up by the previous administration, two sources said on Friday. Economy Minister Giovanni Tria told parliament on Tuesday he thought the original 0.8 per cent target was "too drastic" but gave no indication of where he thought the deficit should go. One of the sources with knowledge of the matter said: "The Treasury aims to raise the 2019 deficit to 1.3 or 1.4 per cent of GDP. This translates into a margin of around 0.6 percentage points of GDP." The increased deficit would provide some €11 billion of additional spending capacity which would be used to help stave off the threat of an automatic increase in sales taxes because of previously missed deficit targets. The previous centre-left administration promised Brussels that Italy's fiscal deficit would fall this year to 1.6 per cent of GDP from 2.4 per cent in 2017. The European Commission has asked Italy to lower the deficit by more, but Tria said on Tuesday that with the economy slowing there would be no additional belt-tightening for 2018. A source said the planned rise in the 2019...