July 28, 2020 / 10:21 AM / 15 days ago

Italy will help tourism, auto sectors in next stimulus drive -minister

ROME (Reuters) - Italy’s latest stimulus package, aimed at helping the economy overcome the coronavirus pandemic, will include help for the tourism and auto sectors, Economy Minister Roberto Gualtieri said on Tuesday.

FILE PHOTO: Italy's Minister of Finance Roberto Gualtieri attends a one day Italo-Franco summit in Naples, Italy February 27, 2020. REUTERS/Ciro De Luca

The government has said it will present the measures, worth a total 25 billion euros ($29.32 billion), in an emergency decree early in August.

A source told Reuters this month that slightly less than 1 billion euros would be allocated to strengthen current incentives to encourage sales of state-of-the-art combustion engine cars as well as electric and hybrid vehicles.

Addressing a parliamentary committee, Gualtieri did not provide details.

The automotive industry accounts for some 6.2% of Italy’s gross domestic product, data provided by Fiat Chrysler Automobiles NV (FCA) (FCHA.MI) showed. Tourism contributes about 13% to GDP, according to the World Trade and Tourism Council.

Gualtieri told lawmakers that part of the extra spending would be used to extend financing for temporary layoff schemes “for a further 18 weeks on a selective basis”. Companies hit hardest in the first half of 2020 will be entitled to ask for more help, he added.

The latest stimulus will drive the 2020 budget deficit to 11.9% of national output, versus a goal of 10.4% set in April, while the country’s public debt is set to rise to 157.6% of GDP this year.

The new measures come on top of some 75 billion euros Rome has already deployed to help businesses and families.

Overall, Rome plans to pledge up to 212 billion euros of economic help for families and firms, including state guarantees on banking loans, though only part of this sum is expected to be spent.

The Italian economy has been ravaged by the coronavirus pandemic, with the European Commission predicting it will contract 11.2% this year — the sharpest fall within the 27-nation bloc.

Reporting by Giuseppe Fonte; Editing by Crispian Balmer

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