The International Monetary Fund (IMF) encouraged Italy on Thursday to continue increasing its public surplus to reach 3% of GDP in 2027, while the country, considered too much expense, had published its red accounts at the end of 2024.
“Fiscal income better than expected in 2024 allowed to return to a surplus” public accounts in the fourth quarter of 2024, congratulated the IMF in a report on Italian public finances called article IV, which had not happened since 2019.
Italy registered a public deficit of 3.4% during the year 2024, after 7.2% in 2023. And above all they have published budget surpluses for several months. In the fourth quarter, the country even registered a surplus (+0.4%) for the first time since 2019.
A situation with which France would dream. As a reminder, according to the new economic projections of the European Commission published on May 19, France will register the worst public deficit in the euro zone in 2025 and 2026, respectively 5.6% and 5.7% of GDP. The figures exceed government commitments, which are directed to 5.4% in 2025 and 4.6% in 2026, to return within 3% in 2029.
On the side of Italy, the time has come to disappointment. Italian public debt remains heavy and the country must “continue” its efforts to “reach a primary surplus of 3% of GDP by 2027” if you want to “solve its debt relationship,” insists the IMF. Because the public debt of Italy was about 3,000 billion euros in 2024, or 135.3% of its GDP. It is the second debt rate in order of importance of the euro zone, behind Greece.
Low expected growth in 2025
Its GDP could only increase 0.4% in 2025, after +0.7% in 2024, due to Donald Trump’s protectionist assaults, according to IMF forecasts. “Different measures can be foreseen,” the IMF suggested, including reforms against “tax evasion” and the abolition of the “preferential rate” for “independent income.”
In addition, “updating the value of the properties in the cadastre”, which would increase the amount of taxes related to real estate, “could guarantee a more equitable fiscal treatment” while more income is generated for the State, advances to the Washington institution. In any case, “any new expense, including defense”, a sector in which Italy has been strengthened in 2024 due to Russian threat, “must be completely compensated with additional savings in other places,” said the IMF.
When developing the budget, the right and extreme right coalition directed by Giorgia Meloni had to tighten the screw to give salaries about the rigor of the accounts in Brussels, being attacked by the European procedure for an excessive public deficit. Even if that means putting the electoral promises to reduce taxes between parentheses: tax burden, that is, the proportion of taxes in GDP, increased in the fourth quarter of 2024, reaching 50.6%.
Source: BFM TV
