Istat confirms: 2025 deficit at 3.1 per cent. Italy remains subject to infringement proceedings

Italy’s deficit-to-GDP ratio stood at 3.1 per cent. This was reported by Istat in its update of the national accounts for the period 2010–2025, which confirms the previous estimate made in April. This means that Italy will not exit the EU infringement procedure initiated in 2024 and that, consequently, there will be less scope for measures to be included in the Budget Bill. The primary balance has also been confirmed, rising from +0.5 per cent in 2024 to +0.8 per cent. Interest expenditure rose by 2 per cent, a slower rate of growth compared with the previous year.

"We note, not without regret, the final figures released by Istat on the 2025 deficit-to-GDP ratio. Unfortunately, Italy will not be able to exit the excessive deficit procedure ahead of schedule this year, as we had hoped, but, in line with the figures already set out in the Draft Budgetary Plan, this may happen in 2027”, commented the Minister for the Economy and Finance, Giancarlo Giorgetti, in an immediate reaction. The reaction from League leader Matteo Salvini was far harsher. “It is surreal that in 2026, Europe’s second-largest industrial power and the world’s fifth-largest exporter should have to rely on ‘zero-point’ mechanisms and logic to determine whether or not it can invest in its future,” he said during a video link with the Senate for the presentation of the Transport Authority’s report. “It will not be this 0.1 that will influence or limit our desire to invest, innovate and ensure safety.” 

Furthermore, according to the data contained in the Istat note, debt in 2025 will stand at 136.7 per cent of GDP, up from 134.2 per cent in 2024. The analysis reveals a downward revision of last year’s figure compared with the previous estimate in April (137.1 per cent). The tables also show a downward revision for the 2024 debt figure (which was estimated at 134.7 per cent in April). The figures for the two previous years have also been revised downwards: the 2023 figure has been revised to 134 per cent (from 133.9 per cent), and the 2022 figure to 138.3 per cent (from 138.4 per cent).

According to the Istat press release, in 2025 GDP at market prices stood at 2,265,003 million current euros, representing an upward revision of 6,954 million compared with last March’s estimate. For 2024, the GDP figure has been revised upwards by 8,564 million euros. In 2025, the rate of change in GDP in volume terms was 0.6 per cent, 0.1 percentage points higher than the estimate from last March. Based on the new data, GDP in volume terms increased by 1.1 per cent in 2024, with an upward revision of 0.3 percentage points. In 2025, gross fixed capital formation increased by 3.9 per cent in volume terms, final national consumption by 1.0 per cent, exports of goods and services by 1.7 per cent and imports by 4.2 per cent. Furthermore, value added in volume terms in 2025 rose by 0.8 per cent in the agriculture, forestry and fisheries sector, by 0.4 per cent in manufacturing, by 2.6 per cent in construction and by 0.3 per cent in the services sector.

The National Institute of Statistics also found that the overall tax burden – that is, the total amount of direct, indirect and capital taxes, as well as social security contributions, as a proportion of GDP – rose in 2025 to 42.9 per cent – up from 42.2 per cent in 2024 – following an increase in tax and social security revenue (+4.1 per cent), which outpaced the growth in GDP at current prices (+2.5 per cent). Istat’s revision of the 2025 deficit again shows a ‘deterioration’ in the estimate by 355 million. For 2025, the note explains, the revision "was upwards for both revenue, 1,991 million, and expenditure, 2,346 million, resulting in a worsening of the net borrowing estimate by -355 million". "As regards revenue, the revisions are attributable to adjustments in the estimate of saleable output and output for own use (+1,758 million), other current revenue (+538 million) and capital revenue (+536 million). These upward revisions were partly offset by downward revisions to taxes (-794 million), in particular indirect energy taxes, and social security contributions (-47 million). The revision to current expenditure amounted to -142 million, reflecting positive adjustments to other current expenditure of +1,271 million and negative adjustments to all other items. Capital expenditure was revised upwards (+2,488 million), mainly due to investments".