ISTAT estimates 2025 deficit at 3.1%, GDP at +0.5%

The game, it was said, is not yet closed, and will only be closed with the Eurostat notification on 21 April. But in any case, the public finance numbers released by the Institute of Statistics are a surprise, first of all for the government that had shown it was aiming for a deficit level below 3% since July, as indicated in the comparison with the International Monetary Fund in the work for the Annual Report on Public Accounts.

If net borrowing at 3.1 per cent is confirmed by the Eurostat stamp, the farewell to the EU excessive deficit procedure will again be expected in 2027, as always envisaged so far in the official public finance programmes. With the consequence, according to what the government has said so far, of only starting the machinery of further re-financing of defence spending next year.

Indeed, it was Giorgetti himself who remarked on several occasions that this path would be taken 'without taking away a euro' from health or welfare spending. But such a possibility is only offered in practice to countries outside the excessive deficit procedure, which can really activate the national safeguard clause provided for by the new Stability Pact by completely excluding additional military spending from the deficit calculations for compliance with EU constraints. Without this precondition, it also appears complicated to request the funds of the Safe programme (up to 14.9 billion for Italia), which as loans weigh on the net debt.

Such a scenario may raise some internal problems within the majority, characterised by a not exactly choral sharing of the idea that it is essential to increase funding for armaments and security. But it certainly does not help the country at the international level, because it complicates the start of the implementation of the commitments made with the partners of the Union and the Atlantic Alliance while war scenarios evolve at a much faster pace than that kept by our public accounts.

But what pushed the deficit beyond the 3% threshold indicated in the October public finance programme and claimed by Prime Minister Meloni only a few days ago in her Bloomberg interview? Obviously there is no single 'culprit', because the deficit is the sum total of revenues and expenditures that are relevant in the year.

The 'tailspin' of the Superbonus evoked by Giorgetti certainly has a weight, because the last door left open by the barrier raised in 2023 allowed an expenditure of another 5.3 billion last year, which also affect net debt, next to the 44.2 billion of tax credits recognised in the past and used in 2025 that instead weigh on debt.

But in the balance, the NRP, which lent a hand to last year's (small) growth but saw an increase in the loan component, which impacts public finance balances, is not irrelevant either.

The deficit at 3.1 per cent, three decimal places below 2024 levels, is also the result of the revenue run, which was replicated last year along with the increase in the employment rate.

In 2025 the levy of taxes and contributions grew by 39.4 billion, to 972.5, bringing the tax burden to 43.1%, seven decimal places above the previous year's figure:this is the highest level since 2014, the year when Italia began to emerge from the Monti government's anti-default cure.

The effects, this time positive, of the NRP are instead felt on the side of the real economy. The growth of GDP in volume is 0.5%, in line with the not too ambitious forecasts of the public finance programme, while without calculating calendar effects (2025 had three extra working days) growth is 0.7%.

The role of the National Recovery and Resilience Plan is most noticeable in the distribution of growth contributions, driven in particular by gross fixed capital formation, which increased by 3.5 % year-on-year, while domestic consumption increased by +0.9 % and the trade balance contributed three times as much as imports (+3.6 %), which increased at a rate of +1.2 %.

On the demand side, value added increased in industry, where, however, the driving force of construction (+2.4%) compensated for the new decline in manufacturing (-0.3%), and in services (+0.3%), while in agriculture value added contracted by 0.1%.