Prime Minister Giuseppe Conte said on Tuesday Italy's 2019 budget deficit looked set to fall to 2.04% of gross domestic product, meaning the country was compliant with European Union finance rules.

The European Commission has threatened to launch disciplinary procedures against Rome because it failed to reduce its large public debt in 2018 as promised, and has called on the Italian government to bolster state accounts.

Rome has ruled out any belt-tightening, but the government said on Monday it would be able to cut this year's official deficit forecast of 2.4%, which was set in April, thanks to lower-than-expected spending and higher revenues.