Milan, Italy: Italy’s budget deficit declined in 2025 but remained slightly above the European Union’s 3 percent threshold, national statistics agency Istat said on Friday. April, 3, 2026.
The deficit stood at 3.1 percent of gross domestic product (GDP), equivalent to €70bn ($81bn), down from 3.4 percent in 2024 and 7.1 percent in 2023, confirming earlier estimates. Italy had aimed to bring the deficit below the EU ceiling set under the Stability and Growth Pact, but slower economic growth late last year prevented it from meeting the target.
Public debt exceeded €3 trillion, accounting for 137.1 percent of GDP, the second highest in the eurozone after Greece. Tax revenues rose by 4.8 percent year-on-year, while government spending increased by 4.1 percent.
Italy is seeking to avoid triggering the European Commission’s excessive deficit procedure, which also applies to France, Belgium and Hungary. Economic prospects remain uncertain as the conflict in the Middle East weighs on growth. Confindustria said the conflict has already reduced Italy’s growth by 0.2 percentage points and warned of recession risks if it continues.
It added that even if the conflict ends soon, Italy’s GDP growth could reach only 0.5 percent in 2026, down from a previous forecast of 0.7 percent. Economy Minister Giancarlo Giorgetti said a broader EU debate on deficit limits was “inevitable” given current geopolitical pressures.
