Istat confirms Italy 2025 deficit at 3.1%, delaying exit from EU procedure

Deficit confirmation and EU procedure

Italy's national statistics agency Istat confirmed on 22 September 2026 that the country's deficit-to-GDP ratio for 2025 stood at 3.1%. The final figure matched the provisional estimate released in April 2025, exceeding the European Union budget ceiling of 3%. The confirmation leaves Italy inside the EU excessive deficit procedure, ruling out the government's target of an early exit in 2026. Economy Minister Giancarlo Giorgetti addressed the outcome on Tuesday following the data release.

We take note, not without sadness, of the definitive data released by Istat regarding the 2025 deficit-to-GDP ratio.

Giorgetti stated that the government now aims for an exit in 2027 in accordance with Italy's Economic and Financial Document.

Unfortunately, Italy will not exit the excessive deficit procedure early this year as we had hoped; however, in line with the figures already set out in the Economic and Financial Document (DEF), this may occur in 2027.

Revised growth and public debt figures

Alongside the deficit confirmation, Istat revised Italy's real gross domestic product growth for 2025 upward by 0.1 percentage points to 0.6%. The statistical agency also raised its 2024 GDP growth calculation by 0.3 percentage points to 1.1%. Public debt reached 136.7% of GDP in 2025, an increase from 134.2% recorded in 2024. The 2025 debt figure was revised downward from the provisional 137.1% estimated in April. Historical debt ratios were adjusted to 138.3% for 2022 and 134.0% for 2023.

Revenue adjustments and primary surplus

The final 2025 accounts showed net borrowing worsened by 355 million euros compared to April estimates, bringing total deficit to 69.7 billion euros. Total revenues increased by 1,991 million euros due to corrections in production and capital revenue, offsetting lower receipts from energy taxes and social contributions. Expenditures increased by 2,346 million euros, driven primarily by upward adjustments to capital investments. Italy recorded a primary surplus of 0.8% of GDP in 2025, rising from 0.5% in 2024. Interest expenditure growth slowed during 2025, registering a 2.0% increase. The national tax burden reached 42.9% of GDP in 2025, expanding by 0.7 percentage points compared to 2024.

Safeguard clause and defense spending rules

Under the 2024 reform of the Stability and Growth Pact, corrective procedures require a minimum annual structural adjustment of 0.5% of GDP. Member states in breach face potential fines of up to 0.05% of GDP if corrective targets are missed. The European Commission allows countries to use a national safeguard clause to exclude defense investments up to 1.5% of GDP over four years (worth roughly 33 billion euros for Italy through 2028), alongside up to 0.6% for green energy investments. Italy requested activation of the clause, which has already been adopted by 16 EU member states. However, EU rules specify that the safeguard clause allows spending flexibility but does not alter the 3% deficit threshold required to close an ongoing infringement procedure. Italy will postpone incorporating these defense deductions until after its planned procedural exit in 2027.