ROME—Italy's budget deficit is likely to be less than the government's targets this year and next due to accelerated fiscal cuts, Economy Minister Giulio Tremonti said in an interview on Thursday.
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Italy's Minister of Finance, Giulio Tremonti, right, attends a debate at the Senate in Rome on Thursday.
"We have front-loaded both spending cuts and tax revenue boosters into the first two years of the adjustment plan, and as a result our budget deficit will be even lower than our targets," Mr. Tremonti said.
The first draft of the deficit-busting measures, unveiled by the government two weeks ago, pushed almost all of the public-spending cuts into the final two years of the fiscal plan, which extends through 2014 and aims to balance the budget by that year. The delay spurred criticism at a time when Italy's sovereign debt was being put under increasing pressure in the markets.
One result of speeding up the government's fiscal resolve will be that the deficit-to-GDP ratio will trend lower than expected, Mr. Tremonti said. The government's pledge was to reduce the budget deficit to 3.9% of gross domestic product this year, 2.7% in 2012, 1.5% in 2013 to reach zero in 2014.
Italy's economy minister also said he expected 16 growth-boosting measures in the bill to increase Italy's economic activity "significantly." The measures include tax breaks for research and development and start-up companies, public-works programs and a plan designed to speed up civil trials. The bill also offers incentives to local administrations to privatize some municipal services, and seeks to deregulate certain professional guilds, including one for ski instructors, of which Mr. Tremonti is a member.
The government's fiscal plan is based on forecast growth of 1.1% this year followed by expansion of 1.5% and 1.6%.
Write to Giada Zampano at giada.zampano@dowjones.com
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