Italy rules out corrective budget amid defense costs

Economy Minister Giancarlo Giorgetti said no corrective measures will be needed this year, despite slower growth and higher defense spending.

Speaking in Cernobbio, Giorgetti explained that Italy had already factored in weaker growth, revising its GDP outlook to 0.6%, and stressed that public finances are on track.

The minister noted that the escalation of the war in Ukraine has created “a new and unwelcome variable” requiring higher defense spending, though amounts are still to be defined. He expressed hope that this would not compromise Italy’s broader economic targets.

On the upcoming budget law, Giorgetti dismissed speculation over summer proposals, stressing that the government will only speak once priorities are defined. He reiterated that Italy is pursuing a serious and prudent fiscal approach, which he said has benefited households, banks, and businesses.

Giorgetti added that the multi-year plan leaves room for further tax relief for families, while ensuring spending commitments remain sustainable. Recent measures have supported low- and middle-income households under €40,000, though the impact has been seen more in savings than in consumption.