Italy remains under the European excessive deficit procedure: public sector net borrowing as a percentage of GDP is still above 3% (3.1% to be precise) . The government's goal of an early exit from the procedure in 2026 is therefore no longer a possibility.

"We note, not without regret, the final data expressed by ISTAT on the deficit/GDP ratio for 2025. Unfortunately, Italy will not exit the excessive deficit infringement procedure early this year, as we had hoped, but, in line with the data already expressed in the DFP, this could happen in 2027," commented Economy Minister Giancarlo Giorgetti .

The 2025 deficit stands at €69.736 billion, compared to the €69.381 billion estimated in April. Nominal GDP, however, rises from €2,258.049 billion to €2,265.003 billion. For 2025, the revision was upward for revenue (€1,991 million) and expenditure (€2,346 million), worsening the deficit estimate by €355 million.

The overall tax burden increased and stood at 42.9% (it was 42.2% in 2024) .

Remaining in the procedure entails a mandatory annual reduction in the structural deficit by 0.5 percentage points and reduced spending margins. Italy is still expected to exit next year, although with the forecast at 2.9%, just a tenth below the threshold, it's not far off from missing the target in 2027 as well.

The comments

"Taxes and debt skyrocket. The latest ISTAT data are a cold shower for the government. Italy is not emerging from the excessive deficit infringement procedure, despite a record-high tax rate of 42.9%, up 0.7 percentage points. The Giorgetti cure is a relentless treatment that's leaking from all sides ," says Pasquale Tridico, head of the Five Star Movement's delegation to the European Parliament . "They've failed; they should step aside."

"A setback for Meloni and Giorgetti," urges the Democratic Party's economic chief, Antonio Misiani . "In recent years, they have focused everything on fiscal stability, raising the tax burden to its highest level since 2014 and cutting many public services, starting with healthcare. This austerity policy, however, has depressed growth, which in 2025 stood third-to-last in Europe despite the National Recovery and Resilience Plan (NRRP). Now the government must avoid a budget of handouts and handouts. What we need is a real growth strategy, because Italy has come to a standstill, and if the economy doesn't recover, the public finances risk worsening again."