FX.co ★ Italy Eyes Lower 2025 Deficit, Near 3% of GDP

Italy is anticipated to report a budget deficit of approximately 3% of GDP, or potentially less, as the government concludes its new multi-year budget plan, set to be revealed this week, according to a Reuters report on Monday. Previously, the country had projected a deficit of 3.3% of GDP for 2025. However, higher-than-expected tax revenues and reduced interest payments on sovereign bonds are likely to narrow the fiscal gap, according to anonymous sources. Although the figures might undergo minor adjustments before cabinet approval, the Treasury remains optimistic that this year's deficit will align at or below 3% of GDP, improving from 3.4% in 2024. This important cabinet meeting to finalize the figures is scheduled for Thursday. Achieving a deficit-to-GDP ratio at or below 3% would enable Italy to conclude the EU’s excessive deficit procedure by mid-2026, a year earlier than planned.