Italy is moving to tackle its high public debt while planning a gradual increase in defence spending, Economy Minister Giancarlo Giorgetti said on Thursday. He spoke in the introduction to the government’s DPFD public finance plan, approved by Premier Giorgia Meloni’s cabinet.
The plan forecasts a deficit-to-GDP ratio of 3% in 2025, better than the previous 3.3% estimate and down from 3.4% in 2024. It expects the ratio to fall to 2.8% in 2026, enabling Italy to exit the EU’s excessive-deficit procedure.
If that target is met, defence spending will rise by 0.15% of GDP in 2026, 0.3% in 2027, and 0.5% in 2028. This would total about 12 billion euros.
Italy’s public debt-to-GDP ratio is forecast to be below the earlier estimate of 137.8% in 2026 and to begin declining in 2027, reaching 136.4% in 2028.
The DPFD also includes income-tax cuts and higher investment in the national health service. GDP growth is projected at 0.5% in 2025 and 0.7% in 2026, slightly down from earlier forecasts due to the impact of US tariffs.
Giorgetti described the debt level as a legacy of past policies that failed to prioritise fiscal prudence. “Such a high debt-to-GDP ratio is an obstacle to the country’s future development and intergenerational equity,” he said.
He added that higher defence spending must be gradual to avoid undermining growth and welfare.
