ROME—Italy’s fiscal watchdog criticized the economic forecasts of the country’s new government, in a blow to the credibility of budget policies that are unnerving investors and the European Union.
The Parliamentary Budget Office said Tuesday it can’t endorse the government’s forecast of 1.5% economic growth next year, adding that it expects growth to be “several tenths of a percent” lower. Weaker growth implies a larger budget deficit than the government is projecting.
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