Italy doesn’t need to bring its deficit above the European Union’s estimate this year in order to fund the tax cuts outlined by Prime Minister Matteo Renzi, Finance Undersecretary Pier Paolo Baretta said.
Advanced countries that based budget plans on optimistic growth forecasts need to spell out how they will meet deficit-reduction targets after 2011, the head of the International Monetary Fund’s fiscal department said.
International Monetary Fund official Carlo Cottarelli said the U.S. needs a medium-term plan to reduce its budget deficit as the danger of the biggest fiscal tightening in more than six decades threatens economic growth.
Energy subsidies cost governments from the U.S. to Egypt $1.9 trillion, discourage private investment and help wealthy consumers more than the poor, according to a study by International Monetary Fund staff.
The U.S. is set to have the largest budget deficit among major developed economies and should narrow it now rather than face tough adjustments in the next two years, the International Monetary Fund said.