Italy Expected to Achieve 1.2% GDP Growth in 2025, Says Junior Minister

Italy anticipates its economy will grow by at least 1.2% in 2025, according to a junior Treasury minister. This comes as the government is preparing to submit its medium-term structural budget plan to the European Commission by September 20.

Reports indicate that the Italian government aims to set a GDP growth target of between 1.3% and 1.4% for 2025, incorporating the anticipated positive effects of planned tax cuts and increased spending. Without accounting for these policy changes, the government expects growth of around 1.1% next year.

Economy Ministry Undersecretary Federico Freni mentioned that a 1.2% estimate for 2025 is feasible, and if actual growth exceeds that, it would be welcome news. Last April, the Treasury had forecasted a 1% growth for this year’s GDP and 1.2% for 2025 under a scenario without policy changes, setting less ambitious targets.

The forthcoming plan will also offer an updated perspective on Italy’s challenging public finances. Earlier this year, Italy was placed under an Excessive Deficit Procedure by the EU, and the Treasury’s plan intends to reduce the fiscal gap following EU guidelines, while complying with the recent reform of the bloc’s fiscal regulations.

This infringement procedure mandates that Italy reduce its structural budget deficit—excluding one-time factors and economic fluctuations—by 0.5% to 0.6% of GDP annually.

Sources recently indicated that Prime Minister Giorgia Meloni’s government will reaffirm its commitment to lowering the deficit-to-GDP ratio below the EU’s 3% limit by 2026 in the upcoming medium-term structural budget plan. Additionally, it is reported that Italy’s deficit-to-GDP ratio may decrease below 4% this year, compared to an earlier estimate of 4.3% made in April, thanks in part to an encouraging trend in tax revenues.