Italy Eyes Lower 2025 Deficit, Near 3% of GDP

Italy is expected to post a budget deficit of around 3% of GDP, or slightly below, as the government finalizes its new multi-year budget plan to be unveiled this week, Reuters reported on Monday.

The country had previously estimated a deficit of 3.3% of GDP in 2025, but higher-than-expected tax revenues and lower interest payments on sovereign bonds are expected to reduce the fiscal gap, sources said, requesting anonymity.

Although the figures remain subject to slight revisions ahead of cabinet approval, the Treasury is confident the deficit will fall to 3% of GDP or lower this year, down from 3.4% in 2024, the sources added.

The cabinet meeting to approve the numbers is expected to be held on Thursday.

A deficit-to-GDP ratio at or below 3% would allow Italy to exit the EU’s infringement procedure for excessive deficits by mid-2026 — one year ahead of schedule.