Italy's economy expanded by 0.7% last year, slightly below the government's 1% projection. However, the budget deficit decreased more than anticipated, according to data released on Monday.
The 0.7% growth in gross domestic product (GDP) reported by the national statistics bureau ISTAT was influenced by four additional working days compared to the previous year, aligning with the growth rate in 2023.
This year, the Treasury aims for a 1.2% growth in the eurozone's third-largest economy, a target viewed as unrealistic by the majority of independent organizations. Analysts predict a consistent 0.7% growth for 2025, the third consecutive year at this rate.
Italy's GDP remained stagnant in the last two quarters of the previous year, resulting in a very weak carryover for 2025's growth.
Rome recorded a budget deficit of 3.4% of GDP in the past year, significantly lower than the 7.2% in 2023 due to costly state incentives for energy-efficient home improvements. This figure was comfortably within the government's 3.8% goal.
Prime Minister Giorgia Meloni aims to reduce the deficit to 3.3% of GDP this year and further below the European Union's 3% threshold by 2026.
Despite the decline in the budget deficit, Italy's public debt, the second-highest in the eurozone after Greece, increased to 135.3% of GDP in 2024 from 134.6% the previous year. The government revised down the 2023 debt level slightly to 134.8%.
This debt increase is attributed to the residual impact of the home renovation program on public finances, despite its gradual phasing out. Rome set a target of 135.8% for 2024 and 136.9% for this year.