Italy's Economy Slows Down: GDP Grows by 0.5%, Deficit Exceeds EU Limit

The latest macroeconomic data from the Apennine Peninsula paints a pessimistic picture of the eurozone's third-largest economy. The Italian National Institute of Statistics (Istat) has officially revised the 2025 indicators, lowering GDP growth dynamics to a modest 0.5%. Simultaneously, the budget deficit stood at 3.1%, which means a breach of EU fiscal rules. The government in Rome points to the Superbonus as the main culprit for this situation, as its settlements continue to burden the state treasury. The situation is complicated by returning price pressure – inflation in February 2026 accelerated to 1.6% year-on-year, driven mainly by a more expensive shopping basket. The Stability and Growth Pact, established in 1997, aims to ensure budgetary discipline in EU countries by imposing debt and deficit limits, but it has been repeatedly suspended or modified in the face of crises. Despite negative signals from the real economy, the Italian Treasury is recording success in debt management. The new issuance of bonds aimed at retail investors, known as Btp Valore, has met with enormous interest. In just two days of subscription, over 10 billion euros were collected, demonstrating the great trust Italian families have in their own state. These instruments offer preferential taxation and exemption from inheritance tax, making them an attractive alternative to bank deposits. In the background of these events, however, critical voices are emerging, including from France, where the media suggest that instead of the promised "economic miracle," Italy is entering a phase of stagnation and structural decline. „I dati sul deficit mostrano il peso del passato che dobbiamo ancora sopportare a causa del Superbonus.” (The deficit data shows the burden of the past we still have to bear because of the Superbonus.) — Giancarlo Giorgetti Growth dynamics problems are not exclusive to Europe. Brazil, the largest economy in Latin America, also closed 2025 with a result of 2.3%, meaning a sharp slowdown compared to the previous year. This decline of 1.1 percentage points results from restrictive monetary policy and high interest rates, which are stifling local consumption. The global economic landscape at the beginning of 2026 indicates a widespread lack of developmental momentum, which in Italy's case is further exacerbated by rising energy costs for the poorest social strata, despite a nominal drop in gas prices. 3.1% — was Italy's budget deficit in 2025