Key insights
- Italy's 2025 deficit-to-GDP ratio is confirmed at 3.1%, exceeding the EU's 3% limit. This limits PM Meloni's spending flexibility and keeps Italy under the EU's excessive deficit procedure. Rising public debt adds to fiscal constraints. While primarily impacting Italy and the EU, it introduces a slight negative influence on US equities due to broader concerns about global economic stability and sovereign debt.
ROME, April 22 (Reuters) - Italy posted a budget deficit of 3.1% of gross domestic product last year, statistics bureau ISTAT reported on Wednesday, confirming previous data and dashing Rome’s hopes of exiting an EU disciplinary procedure for its "excessive" deficit.
The deficit figure, contained in ISTAT’s official notification to the European Commission, is lower than the 3.4% deficit-to-GDP reading in 2024 but just above the European Union’s 3% limit.
This means Italy will remain this year under an EU excessive deficit procedure, limiting Prime Minister Giorgia Meloni’s spending leeway ahead of an election scheduled in 2027.
For weeks, the government had said it hoped for a downward revision to 3.0% -- its target for 2025 -- from the 3.1% that ISTAT had estimated in March.
Italy’s Treasury currently forecasts the deficit falling to 2.8% of GDP this year, although it may revise that figure in new projections it is due to publish later on Wednesday.
Meloni and her Economy Minister Giancarlo Giorgetti are pressing the EU to suspend its fiscal rules to help governments counter the negative economic impact of turmoil in the Middle East, but so far to no avail.
ISTAT also reported that Italy’s public debt, proportionally the second-highest in the euro zone after Greece’s, rose to 137.1% in 2025, confirming its previous estimate.