Italy to cut 2020 GDP growth target to around 0.6 per cent: Sources

Italywillcutitstargetfor economicgrowthnext year toaround0.6 per cent, threesourcesclose to the matter told Reuters on Monday, as the government prepares its2020budget to be presented to parliament later this month.

The previoustarget, issued in April, envisagedgrowthof 0.8 per cent.Growththis year is now seen at just 0.1 per cent, compared with an April projection of 0.2 per cent.

Under an unchanged policy scenario, the gross domestic product next year would bearound0.4 per cent, which will be bolstered slightly bygrowth-enhancing measures in the budget, said two of thesourceswho asked not to be named.

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The newtargets, which will form the framework of the budget, must be formally published by Friday.

The budget deficit will betargeted at close to 2.2 per cent of gross domestic product, two of thesourcessaid, though they added that marginal last-minute changes were possible due to ongoing negotiations with the European Commission.

The 2.2 per cent targetpencilled in is more likely to be reduced than raised, they said.

This year's deficit is currently officiallytargeted at 2.04 per cent, but thesourcessaid it would come in somewhat lower.

Brussel's main request is that the so-called "structural" deficit, stripped of the effects of the business cycle and one-off items, should not increase next year, one of the sources said.

The Treasury declined to comment.