Rome: Italy's government approved on Monday the 2018 budget, which includes measures aimed at reducing youth unemployment, tackling poverty and encouraging investments.
The financial package aims to lower next year's budget deficit to 1.6 per cent of gross domestic product (GDP) from a targeted 2.1 per cent this year, while avoiding painful belt-tightening measures ahead of a 2018 general election.
Prime Minister Paolo Gentiloni's task has been made easier by stronger-than-expected economic growth and low interest rates which reduce the cost of servicing Italy's huge public debt — the highest in the euro zone after Greece's.
The package will be sent to the European Commission for review and at the same time begin its passage through parliament, where it must be approved by the end of the year.
"This budget brings greater growth and a consolidation of public finances, with both the deficit and debt levels falling," Economy Minister Pier Carlo Padoan told reporters.
It is likely to be one of the last pieces of legislation passed by parliament before the president dissolves the upper and lower houses and calls the election.
Last month the government increased its GDP growth forecast for this year to 1.5 per cent from 1.1 per cent, and hiked next year's outlook to 1.5 per cent from 1.0 per cent.
The debt-to-GDP ratio is targeted to edge down in 2018 to 130.0 per cent from a targeted 131.6 per cent this year.