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Italian fiscal policy and budget planning

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2026-10-03 07:04 UTC → 2026-10-03 23:58 UTC · added ~~removed~~

The Italian government has initiated fiscal measures to manage economic pressures and comply with European governance rules. Initially, the administration issued a directive to reduce political spending, targeting savings of 100.9 million euros by 2027 through strict budget constraints on ministers and mission structures. This move faced criticism from Movimento 5 Stelle deputy Ida Carmina, who argued against prioritizing debt reduction and military spending over social services like healthcare and education. Following these austerity efforts, the Council of Ministers approved the Documento Programmatico di Finanza Pubblica (Dpfp). This plan includes a requested budget deviation of 28 to 29 billion euros, split equally between 2027 and 2028, to fund defense and energy at 0.3% of GDP annually. Economy Minister Giancarlo Giorgetti described the approach as “more prudent” in response to inflation, rising interest rates, and international conflicts. As of October 2, 2026, the Council of Ministers has formally approved the DPFP, which serves as the preliminary step for the upcoming Budget Law. The requested flexibility will be allocated as approximately 14 billion euros per year for 2027 and 2028. Notably, planned expenditure for defense has been reduced compared to previous summer estimates to prioritize energy relief for families and businesses. While GDP growth projections for 2026 have been revised upward to 1% from 0.6%, subsequent programmatic growth is estimated to remain low, at 0.8% for 2027, 0.9% for 2028, and 0.8% for 2029. The deficit is expected to rise to 3.4% in 2027 and 3.3% in 2028. Public debt is projected to reach 138.1% of GDP in 2026 and 138.6% in 2027. The Chamber of Deputies is scheduled to vote on the DPFP and the budget deviation request on October 13.

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