Italy slashes 2025 growth forecast

The government has halved its 2025 growth forecats for this year to 0.6% in the new Public Finance Document (DFP), formerly the DEF, its economic blueprint, Economy Minister Giancarlo Giorgetti told a press conference, CE Report quotes ANSA.

"We have decided to adopt growth estimates aligned with those recently reduced by the Bank of Italy, so we have real GDP growth of 0.6% in 2025, 0.8% in 2026 and 0.8% in 2027, effectively halving the Plan's forecast of 1.2%", he said.

Giorgetti added that the budget deficit would be 3.3% this year and that the planned trajectory had been respected.

"Deficit at 3.3% in 2025, 2.8% in 2026 and 2.6% in 2027", Giorgetti told the press conference after the cabinet meeting that approved the new DFP.

"The cash effect of the superbonus credits will tend to deflate, even the trajectory plan based on the new European governance is respected: we forecast 1.3%, then 1.6%, 1.9%, 1.7% and 1.5% in 2029." Giorgetti added defence spending would be raised to 2% of GDP as per a NATO request.

"Defense spending at this time maintains its original orientation and trend, we believe, based on our accounting criteria that will eventually be discussed at NATO, to be in line with the 2% request".

He said "The increase in defense spending requested by the Commission and NATO will imply making choices that are not considered appropriate at the moment and will be made within the prescribed timeframe: there is a substantial request from the Commission to request the national exception clause with respect to the indicators by the end of April, therefore Parliament will probably have to express itself in the resolution on the DEF because proceeding in that direction will require a deviation that requires a strengthened voting procedure in both Chambers".

Giorgetti stressed: "This Public Finance Document is being adopted in a very complex situation from a global economic perspective and therefore in terms of its repercussions on the national economy.

This makes forecasts not only long-term but also short-term very complex and difficult, even uncertain."