Government Halves 2025 Growth Forecast to 0.6% Amid Economic Challenges

Rome: The government has significantly adjusted its economic outlook by reducing the 2025 growth forecast to 0.6%, as detailed in the newly released Public Finance Document (DFP). Economy Minister Giancarlo Giorgetti announced this revision at a press conference, emphasizing alignment with the Bank of Italy’s recently reduced estimates.

According to Ansa News Agency, the adjustments in the growth forecast reflect a halving from the previously anticipated 1.2%. The government now anticipates a GDP growth of 0.8% in both 2026 and 2027. Giorgetti also addressed the budget deficit, projecting it to be 3.3% for the current year, with a planned reduction trajectory in the subsequent years-2.8% in 2026 and 2.6% in 2027.

Giorgetti highlighted the impact of the superbonus credits, which are expected to deflate over time, while maintaining adherence to the new European governance plan. This plan forecasts a gradual adjustment in deficit levels, with projections at 1.3% in 2029, followed by 1.6%, 1.9%, 1.7%, and 1.5% in the subsequent years.

In response to a NATO request, Giorgetti confirmed an increase in defense spending to 2% of GDP. He noted that while this increase is aligned with NATO’s request, it necessitates strategic decisions that will be evaluated within the prescribed timeframe. The potential invocation of a national exception clause is under consideration, which may require parliamentary approval through a strengthened voting procedure.

Giorgetti concluded by acknowledging the complexity of the current global economic landscape and its impact on national forecasts. He noted the inherent challenges and uncertainties in making both long-term and short-term economic predictions.