The Bank of Italy said Tuesday that government interventions to help households and businesses cope with the energy-price shock should be targetted and have a limited duration given the state of the public finances, as it reported to a parliamentary hearing on the government's DFP economic blueprint.
"It will be crucial to carefully monitor spending trends, taking into account that stronger-than-expected price growth would make it even more difficult to adhere to the planned consolidation path," the central bank said.
"Italian fiscal policy will be called upon to fulfil its international defence commitments and to address the need to mitigate the impact of the energy crisis on households and businesses.
"The response to the energy shock should be limited to targeted interventions of restricted size and duration".
The bank said it expected mortgages and loans to families and enterprises to have fallen this quarter because of the Iran war and its impact on energy prices.
