Italy approves 2025 budget, aims to cut deficit

Italy’s parliament approved the budget for 2025 on Saturday, delivering a victory for Prime Minister Giorgia Meloni just before the year-end deadline.

The Senate passed the budget with 112 votes in favour, cementing plans to reduce the country’s deficit to 3.3 per cent of GDP next year and below the EU’s 3 per cent ceiling by 2026.

The budget includes tax cuts aimed at middle- and low-income earners and retains a 26 per cent tax on cryptocurrencies, set to rise to 33 per cent in 2026.

While public debt is expected to climb due to lingering costs from state construction subsidies, Italy’s economic growth is projected at 0.5 per cent for 2024 and 0.8 per cent for 2025.

Markets have responded positively, with the spread between Italian and German 10-year bonds at a three-year low. Lower borrowing costs are also expected to save the government €1.7 billion ($1.8 billion) next year.

Attribution: Bloomberg

Subediting: Y.Yasser