Italy's economy minister is trying to reassure financial markets and everyday citizens as political leaders squabble in uphill negotiations to forge a new government.

Giovanni Tria, non-partisan economy minister in the just-collapsed populist coalition, predicted in an interview in Sunday's Corriere della Sera that Italy's 2020 deficit will be less than feared.

He insists there's "room to maneuver" to avoid a sales tax hike that would punish Italy's already long-ailing economy.

If no new coalition can be formed, elections seem inevitable this fall.

Euroskeptic Deputy Premier Matteo Salvini triggered the collapse last week by yanking the support of his right-wing League party, which has governed since June 2018 together with the anti-establishment 5-Star Movement.

Whoever governs this fall will have to make painful budget cuts to meet European Union expectations.