Economic growth of 6% is forecast in Italy in 2021, following last year’s record contraction of 8.9%, according to two government sources, whilst the country’s budget deficit is targeted at 9.5% of GDP.

The GDP growth forecast of 6% is upwardly revised from the predicted 4.5% from April, whilst the new deficit target of 9.5% is a steep drop from the prior 11.8% forecast, Reuters reports.

Although the lower deficit will push Italy’s debt-to-GDP ratio under the past 159.8% target, it will remain over the 155.6% mark from 2020, and signal a new post-war record, according to the government sources.

Although they were not able to offer the new target, they added the debt would be aimed at following a downward trend in the coming years.

The revised forecasts were agreed during a meeting on Tuesday of key coalition figures, and are due to be ratified in the government’s biannual Economic and Financial Document (DEF) for approval by the cabinet on Wednesday.

The Economic and Financial Document will establish new economic and public finance targets for 2021-2024.

Italy’s Economy Minister said during Tuesday’s meeting that the DEF forecasts would permit additional spending of as much as 1% of GDP, equating to around €16 billion, between 2022 and 2024, said the sources who attended the meeting.

The document will set the structure for Rome’s budget for 2022 due to be presented in the middle of next month.

The Economic and Financial Document will target GDP growth of more than 4.5% next year, said one of the sources stated. Rome set a 4.8% target back in April.