Italy Expands Spending by Increasing Its Budget Deficit
Under the new budget, the country's budget deficit is expected to rise from 2.9% of GDP in 2026 to 3.4% in 2027.
The government led by Italian Prime Minister Giorgia Meloni has approved a new budget plan worth €26 billion for 2027. The plan primarily aims to support middle-income earners, reduce the tax burden and increase funding for the healthcare system.
Under the new budget, the country's budget deficit is expected to rise from 2.9% of GDP in 2026 to 3.4% in 2027. This would exceed the 3% threshold set by the European Union.
Additional funds will be raised from high-revenue sectors to finance the budget. Financial institutions are expected to contribute more than €5 billion, while energy and gambling companies are each set to provide an additional €700 million.
According to Giorgia Meloni, the plan includes tax relief for middle-income earners and self-employed individuals, as well as an additional €3.4 billion allocation to the National Health Fund.
In addition, the government plans to make the exemption from vehicle ownership tax permanent for small and medium-sized vehicles. The new budget is expected to be presented for discussion and voting in both chambers of the Italian Parliament next month.