(Bloomberg) -- Italy's government plans to boost spending by 23.6 billion euros ($27.5 billion) next year, according to a document seen by Bloomberg.
Prime Minister Mario Draghi's cabinet on Tuesday afternoon approved an outline of the upcoming budget law, which will now be submitted to the European Commission. The full law must be approved by the Parliament by the end of the year.
The plan includes around 6 billion euros to reform the tax system, which should cut income taxes and reduce labor costs. This comes on top of the 2 billion euros which have already been allotted for this.
After spending almost 5 billion euros to neutralize the impact of higher energy prices for consumers, the government will set aside another 2 billion euros in 2022, but plans to recoup the sum already the following year, according to the document, which didn't provide details. A controversial unemployment benefit known as “citizenship income” will receive an addition 800 million euros in 2022.
Italy expects its economy to grow 4.7% next year, with strong growth also seen in 2023, according to an economic update presented last month. Growth will allow for a gradual reduction of debt to its pre-crisis level of 134.3% of output by 2030.
Draghi to Unveil Italian Budget Based on 6% Growth Surge in 2021
In Tuesday's document, the government also raises the alarm on inflation, warning that there is a “concrete risk of transmission of significant price increases from production to consumption.”
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