Italy Hits 3% Deficit With Meloni Pushing Tax Cuts, Defense (1)

Italy’s cabinet approved a budget featuring a deficit at just 3% of output this year, allowing Premier Giorgia Meloni’s government to set aside more money for tax cuts and defense.

The shortfall is seen narrowing to 2.8% in 2026, followed by 2.6% and 2.3% in the following years, according to a statement Thursday. Growth is expected to come in at just 0.5% in 2025 and 0.7% in 2026, while debt is seen at 136.4% in 2028.

The milestone of reaching the European Union’s 3% ceiling this yearcould open the door to Italy exiting the bloc’s excessive deficit ...