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2w ago

IMF Praises Italy’s Budget Surplus and Labor Market Strength

Sustained budget discipline coupled with rapid PNRR deployment will be crucial to reduce debt levels under growing trade tensions.

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Overview

  • The IMF’s July 22 Article IV report highlights a primary surplus in 2024 that exceeded expectations thanks to stringent fiscal measures.
  • Italy’s employment rate reached record highs in mid-2025, bolstering resilience against shocks from US tariffs and geopolitical uncertainty.
  • Public debt surpassed €3 trillion by mid-June, prompting the IMF to stress the need for continued consolidation to put debt on a clear downward path.
  • Under its baseline scenario the IMF projects Italy’s GDP growth at 0.5% in 2025, 0.8% in 2026 and 0.6% in 2027.
  • Analysts urge full deployment of PNRR funds and accelerated structural reforms to sustain moderate growth and mitigate risks from escalating trade tensions.