Italy’s budget deficit stays above EU limit

Italy recorded a budget deficit of 3.1% of gross domestic product (GDP) last year, remaining just above the European Union’s 3% threshold and keeping the country under an EU excessive deficit procedure, according to data released on April 22 by the national statistics agency ISTAT.

The figure, submitted in ISTAT’s official notification to the European Commission, confirms earlier estimates and shows a slight improvement from 3.4% in 2024. However, it still falls short of Rome’s expectations of meeting the EU fiscal limit, which would have allowed it to exit the disciplinary process, Reuters reports. 

The outcome means Italy will remain subject to EU fiscal constraints, limiting the government’s budget flexibility ahead of the 2027 national elections.

For weeks, the government had expressed hope that the deficit would be revised down to 3.0%, in line with its target for 2025. Italy’s Treasury currently projects the deficit will decline further to 2.8% of GDP this year, though updated forecasts are expected to be released later on April 22.

Prime Minister Giorgia Meloni and Economy Minister Giancarlo Giorgetti have also urged the European Union to suspend strict fiscal rules, arguing that governments need more flexibility to respond to economic risks linked to instability in the Middle East. The request has so far not been accepted.

ISTAT also reported that Italy’s public debt rose to 137.1% of GDP in 2025, confirming previous estimates. The country’s debt remains the second highest in the eurozone after Greece.

By Sabina Mammadli