Italy will hike budget deficit by further 20-30 billion euros: official to paper

ROME (Reuters) - Italy will increase this year's budget deficit by a further 20-30 billion euros ($35.78 billion) to finance measures to support the economy hit by the coronavirus crisis, Economy Undersecretary Claudio Durigon said in an interview on Monday.

"We are working on the numbers. It will be relevant, between 20 and 30 billion euros," Durigon told daily Il Messaggero.

He added that the extra spending would help finance new measures to support and relaunch the economy, needed by the country, particularly after the new shutdowns and restrictions which started on Monday.

Prime Minister Mario Draghi had said on Friday that he would ask parliament in April for authorisation to increase spending further.

This week the national unity government will present a 32-billion euro package of measures, including the extension of furlough schemes and compensation for firms hit by the COVID-19 pandemic. This has already been budgeted for by the previous government

Rome's most recent estimate was for a deficit-to-GDP ratio of 8.8% this year, down only slightly from 9.5% in 2020 when the economy shrank by 8.9%, Italy's steepest recession since World War Two.

Durigon also said that spending for the national vaccination campaign - which aims to vaccinate at least 80% of the population by September - would be "an important chapter" of spending, worth some 5 billion euros.

($1 = 0.8384 euros)

(Reporting by Stefano Bernabei, Writing by Giulia Segreti; Editing by Jacqueline Wong)