Italy plans to reaffirm its commitment to reducing the deficit-to-GDP ratio below the European Union’s 3% ceiling in 2026, after a projected 3.1% in 2025. The government expects this year’s deficit to broadly match its 2.9% target announced in April and plans to raise its 2025 growth forecast to as much as 1% from 0.6%. The 3.1% figure confirmed by ISTAT prevented Italy from leaving the European Union’s excessive deficit procedure (EDP) early this year, with Economy Minister Giancarlo Giorgetti saying an exit may instead occur in 2027. Italy’s current deficit target for next year is 2.8%, while the European Commission has granted countries flexibility to increase spending on energy relief and defense through a national escape clause. Rome aims to use that flexibility for additional deficit spending worth 1.5% of GDP, or about €34 billion, through 2028.