ROME, Reuters Italy39;s government plans to raise its 2024 budget deficit target to between 4.1 and 4.3 of gross domestic product GDP, up from the 3.7 goal set in April, sources familiar with the matter told Reuters on Monday.

The fiscal gap next year is, however, seen below 4 of GDP under current trends.

That allows leeway worth several billion euros which will help Prime Minister Giorgia Meloni to fund measures in the upcoming 2024 budget.

Among her top priorities, Meloni intends to earmark more than 9 billion euros 9.5 billion to extend to 2024 the tax cuts that have helped middle and lowincome workers cope with high consumer prices this year.

Italy is also preparing to raise this year39;s budget deficit above the current target of 4.5 of GDP due to the growing impact of costly fiscal incentives for home improvements.

Separate sources last week said the updated 2023 goal would be in the region of 5.5 as a proportion of GDP.

For 2024, the upcoming budget has been made challenging by a slew of weak data that cast a shadow over Italy39;s nearterm growth prospects, hurting tax revenues.

The country39;s GDP shrank by 0.4 in the second quarter from the first and industrial output was weaker than expected in July, getting the third quarter off to a faltering start.

Moreover, the negative impact on Italy39;s economy from European Central Bank ECB interest rate hikes to curb inflation will intensify in the coming months, economists warn.

The Treasury currently…