Italy will progressively reduce its public deficit, which will be 2.8% of GDP in 2026, 2.6% for 2027, and 2.3% for 2028, while it announced that it will be 3% in 2025, respecting for the first time since 2019 the ceiling of the European Union, according to the Public Finance Planning Document (DPFP) that was published this Friday after its approval last night.
“We confirm our firm and prudent approach, which takes into account the need to keep public finances in compliance with the new European rules, but within the framework of essential measures to support the economic and social growth of workers, families and businesses,” said the Minister of Economy and Finance Giancarlo Giorgetti in a statement.
The Italian fiscal and financial plan, which is put forward by the Budget Law, includes a 0.15% increase in GDP in 2026, 0.3% in 2027 and 0.5% in 2028, which will be allocated to defense spending.
The projected GDP growth rate is 0.7% for 2026, 0.8% for 2027, and 0.9% for 2028. The trend growth rate is 0.7% in 2026 and 2027, and 0.8% in 2028, although it was specified that “these data are based on very conservative estimates that are currently also affected by the international geopolitical context”.
While the 2026-2028 budget will finance interventions for an average annual amount of approximately 0.7 percentage points of GDP. The financing will come from a combination of revenue measures, for an approximate amount of 16 billion euros.
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Among the measures announced is a reorganization of the tax burden, reducing the impact of the burden on labor income and ensuring greater refinancing of the national health fund.
To ensure the continuity of the measures approved by the Government, specific measures will be implemented to stimulate business investment and guarantee its competitiveness. Measures to promote birth rates and the reconciliation of work and personal life will also continue to be expanded.
