Italy’s €10bn tax cuts to low-income earners will ‘help avoid contraction’

Prime Minister Matteo Renzi’s €10bn of tax cuts to low-income earners will allow Italy to narrowly avoid a contraction this year, his chief economic adviser has said.

“Without that measure, we would forecast an even worse economic scenario” than the 0.2% rise projected this month by the country’s central bank, Filippo Taddei, head of economic policy in Renzi’s Democratic Party, said.

“GDP would rise no more than 0.1% this year” with no intervention.