How are Italy’s public accounts doing? Here is what emerges from the latest Istat data.
ISTAT DATA ON ITALY’S PUBLIC ACCOUNTS
Istat published this morning the main data of the Notification on net borrowing and Public Administration debt, referring to the period 2022-2025, transmitted to the European Commission in application of the protocol on the Excessive Deficit Procedure annexed to the Maastricht Treaty. The data show that Italy’s deficit-to-GDP ratio decreased in 2025 but not enough to exit early from the European excessive deficit procedure.
HOW THE DEFICIT-TO-GDP RATIO IS GOING IN ITALY
According to the national statistical institute, last year the net borrowing of Public Administrations (-69.4 billion euros) was equal to -3.1% of GDP, a decrease of 4.4 billion compared to 2024 (-73.8 billion euros, corresponding to -3.4% of GDP).
The primary balance (net borrowing excluding interest expenditure) was positive and equal to 0.8% of GDP, with an improvement of 0.3 percentage points compared to 2024. Interest expenditure, which according to current accounting rules does not include the impact of swap operations, was equal to 3.9% of GDP, remaining unchanged compared to 2024.
At the end of 2025, public debt, measured gross of liabilities related to financial support interventions in favor of Eurozone Member States, was equal to 3,096 billion euros (137.1% of GDP), up from 2,967 billion in 2024 (134.7% of GDP). Compared to 2024, therefore, the ratio between PA debt and GDP increased by 2.4 percentage points.
In its note, Istat reports that “no reservations were expressed by European authorities on the Notification transmitted by Italy.”
THE INFRINGEMENT PROCEDURE: STATUS AND SCENARIO
The improvement in the deficit-to-GDP ratio recorded in 2025 is however not sufficient to guarantee an early exit of the country from the European excessive deficit procedure, which would have required a deficit below 3% of gross domestic product.
In the euro area, the deficit-to-GDP ratio decreases to 2.9% in 2025
The decline in Italy’s deficit-to-GDP ratio fits into a broader context of decline in the euro area (EA20), where the ratio decreased from 3.0% in 2024 to 2.9% in 2025, according to data provided by Eurostat. In the EU, instead, it remained unchanged at 3.1%, the same level as in 2024.
Regarding the public debt-to-GDP ratio, in the euro area it increased from 87.0% at the end of 2024 to 87.8% at the end of 2025 and in the EU it rose from 80.7% to 81.7%.
COMPARISONS BETWEEN STATES
In 2025, all Member States, except Cyprus (+3.4%), Denmark (+2.9%), Ireland (+1.8%), Greece (+1.7%) and Portugal (+0.7%), recorded a deficit. The highest deficits were recorded in Romania (-7.9%), Poland (-7.3%), Belgium (-5.2%) and France (-5.1%). As many as 11 Member States recorded deficits equal to or greater than 3% of GDP.
At the end of 2025, the lowest public debt-to-GDP ratios were recorded in Estonia (24.1%), Luxembourg (26.5%), Denmark (27.9%), Bulgaria (29.9%), Ireland (32.9%), Sweden (35.1%) and Lithuania (39.5%). As many as 12 Member States had a public debt-to-GDP ratio above 60%, with the highest values recorded in Greece (146.1%), Italy (137.1%), France (115.6%), Belgium (107.9%) and Spain (100.7%).
Finally, the ratio of total public expenditure to GDP in 2025 stood at 49.8% of GDP in the euro area, while the ratio of total public revenues to GDP was 46.9%. For the EU, the values were respectively 49.5% and 46.4%. Compared to 2024, the ratios between revenues and public expenditure increased both in the euro area and in the EU.
