Published by Global Banking and Finance Review
Posted on September 20, 2025
2 min readLast updated: January 21, 2026
Italy's budget deficit may fall below 3% of GDP in 2023, aided by increased tax revenue, says Finance Minister Giancarlo Giorgetti.
ROME (Reuters) -Italy's budget deficit could fall below the European Union's ceiling of 3% of gross domestic product (GDP) this year, ahead of time, Economy Minister Giancarlo Giorgetti said on Saturday.
The government pledged in April to cut the fiscal deficit to 3.3% of GDP this year, down from 3.4% in 2024, with a further decline to 2.8% expected in 2026.
But a steady increase in tax revenue has raised the prospect of faster-than-expected deficit reduction.
In the first seven months of the year, tax revenue rose on an annual basis by 5.3% or more than 16 billion euros ($18.79 billion) in absolute terms.
When asked about the possibility of the deficit dropping below the 3% ceiling as early as this year, Giorgetti said: "It is possible." He made the comments while attending a meeting of EU finance ministers in Copenhagen.
Reducing the fiscal deficit to less than 3% of GDP this year would allow Italy to exit the EU infringement procedure for excessive deficits by mid-2026. Brussels started disciplinary budget steps against Italy in 2024.
These restrict countries' flexibility with regard to taxation and spending policies as they must cut their fiscal deficit by a prescribed amount each year.
"The opportunity to exit the procedure is real, and it is in the country's interest to seize it," Giorgetti said.
($1 = 0.8515 euros)
(Reporting by Giuseppe Fonte. Editing by Jane Merriman)
Italy's budget deficit could fall below the European Union's ceiling of 3% of GDP this year, according to Finance Minister Giancarlo Giorgetti.
In the first seven months of the year, tax revenue rose by 5.3% on an annual basis, amounting to more than 16 billion euros.
Reducing the fiscal deficit to less than 3% of GDP this year would allow Italy to exit the EU infringement procedure for excessive deficits by mid-2026.
Giorgetti stated that 'the opportunity to exit the procedure is real, and it is in the country's interest to seize it.'
The government pledged to cut the fiscal deficit to 3.3% of GDP this year, down from 3.4% in 2024, with a further decline to 2.8% expected in 2026.
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