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1h ago

Istat Confirms Weak Growth as Italy’s Tax Burden Jumps to 42.5%; OECD Keeps 2025–26 Outlook at 0.6%

The new figures set the baseline for the autumn budget, sharpening debate over tax relief versus structural reforms.

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Overview

  • Istat’s revision shows the overall tax and contribution ratio rose to 42.5% of GDP in 2024, with receipts up 5.8% against 2.7% nominal GDP growth, pointing to fiscal drag effects.
  • GDP growth is confirmed at 0.7% for 2024 and revised up to 1.0% for 2023, while the 2024 deficit stands at 3.4% of GDP and public debt is trimmed to 134.9%.
  • The spending mix shifted as current outlays increased 4% with interest costs up 10.1%, and capital expenditures fell about 40% following the unwinding of construction bonuses.
  • The government signals it will frame the Documento programmatico by Oct. 2 and aims to move the deficit below 3%, as the contentious ‘rottamazione’ measure is likely deferred to the budget bill.
  • The OECD projects Italian growth at 0.6% in both 2025 and 2026 and cautions that high debt and rising trade barriers reinforce the case for accelerating structural reforms.