Key facts
- Italy's public deficit was 3.1% last year, above the EU's 3% cap.
- Italy will remain under the European Commission's "excessive deficit procedure."
- Finance Minister Giancarlo Giorgetti expects Italy to exit the procedure in 2027.
- Italy's economy is forecast to grow 0.6% next year, the slowest in the EU.
- Italy's debt is set to reach 139% of GDP.
Italy's government has failed to reduce its public deficit enough to exit the European Union's fiscal oversight, a setback for Prime Minister Giorgia Meloni ahead of the 2027 general election. The Italian National Institute of Statistics confirmed that the gap between the country’s public expenditure and revenues last year was 3.1%, above the EU's budget deficit cap of 3% under the bloc's rules for public spending.
This deficit breach keeps Italy in the European Commission's "excessive deficit procedure" (EDP), a designation for governments that need to improve their public finances. Italy has been subject to the EDP and Brussels' fiscal oversight since 2024, compelling Rome to adhere to stricter spending caps.
"Unfortunately, Italy will not exit the excessive deficit procedure ahead of schedule this year, as we had hoped, but … this may happen in 2027," Finance Minister Giancarlo Giorgetti said in a statement on Tuesday in response to the fresh statistics.
The figures are a disappointment for Meloni's government as the country prepares for elections in 2027. The state of the economy is expected to be a key issue for voters, with Rome continuing to grapple with energy and debt costs amid the ongoing war in the Middle East. Opposition parties contend that Meloni's failure to meet the deficit target is a direct consequence of her government's economic policies, which they describe as austerity-driven and lacking a growth strategy.
Next year, Italy's economy is projected to grow by 0.6%, the lowest rate in the European Union. Its debt is also set to surpass Greece's, reaching 139% of gross domestic product.