Italian Economy Minister Giovanni Tria told the parliament said the government have downgraded growth forecast for both this year and next.

2018 GDP growth is projected to be 1.2%, down from prior forecast of 1.5%. 2019 GDP growth is projected to be at 1-1.1%, down from prior forecast of 1.4%.

Tria added that the slowdown would bring deficit to 1.2% in 2019, higher than deficit target of 0.8% of GDP, drawn up by prior administration.

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A more clearer estimate of the deficit will be available later in September. The figures will depend on the cost of servicing the debts and spending cuts.

While the plan appears to be at odds with EU rules, Tria emphasized that it’s still “compatible” with Italy’s commitment to EU on its public finances.

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