09.10.202501:13:28UTC+00Italy May Cut Budget Deficit Below 3% of GDP in 2025

Italy's budget deficit is likely to drop below 3% of GDP as early as this year, according to Economy Minister Giancarlo Giorgetti, as reported by Reuters. Giorgetti stated at an event in Rome that the deficit-to-GDP ratio is expected to consistently decrease below 3% beginning in 2026, potentially even by 2025, depending on developments. Last week, the minister indicated that the government intends to revise its 2025 deficit-to-GDP target to 3%, down from the previously forecasted 3.3%. Achieving a 3% or lower ratio would enable Italy to conclude the EU's procedure regarding excessive deficits by mid-2026, a year ahead of the anticipated schedule. In 2024, Italy's deficit was recorded at 3.4%, which was comfortably below the government's target of 3.8%. Nonetheless, recent figures revealed a 0.1% contraction in the country's GDP quarter-on-quarter for Q2 2025. Consequently, the government has adjusted its full-year 2025 growth forecast to 0.5%, a slight decrease from the 0.6% estimated in April.