Italy’s public debt-servicing costs are rising at an alarming rate amid geopolitical tensions, Economy Minister Giancarlo Giorgetti said Friday. Borrowing costs jumped at an auction last week, with the three-year BTP yield reaching 3.43%, its highest since June 2024, and the seven-year yield reaching 3.98%, its highest since November 2023. Giorgetti said inflation would rise if the wars in Ukraine and the Middle East continue, arguing that the pressure stems from supply shocks rather than excessive demand. Italy’s latest budget plan projects public debt peaking at almost 139% of GDP this year, making it the euro zone’s most indebted country. The government plans to scrap road tax for 14.5 million cars and motorcycles from next year at a cost of €2.4 billion ($2.75 billion), in addition to €2.8 billion allocated this year for temporary excise-duty cuts. Rome also plans to use 0.6% of GDP, or about €14 billion through 2028, in additional deficit flexibility under the EU’s National Escape Clause to ease energy costs. Giorgetti said Italy was seeking a downward revision of its 2025 deficit to below the EU’s 3% ceiling, which could support an early exit from the bloc’s disciplinary procedure. ISTAT and Eurostat are due to publish revised 2025 deficit data on September 22.