Specifically, government ministers pledged to enact a minimum income for the poor, cut down a previous pension reform and diminish taxes in the forthcoming 2019 budget, which fueled concern over the government’s ability to pay for these programs.

Italy Economy & Growth Gap

Furthermore, the government will focus on stimulating the economy with a goal of halving the one percentage growth gap between Italy and the rest of the Eurozone by next year.

“We will implement these measures gradually… We are looking into Italy’s big state balance sheet to find financial resources to be shifted toward these measures,” Tria said.

Revealing its optimistic outlook, Investment bank Morgan Stanley recommended tactically buying Italian bonds and stocks ahead of the country’s budget announcement, Reuters reported.

“While the macro outlook remains challenging in the medium term, a middle-ground fiscal expansion is likely to come as a relief to markets,” Morgan Stanley analysts said in a note.

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