Italy's deficit grew to 7.4 pct of GDP last year

ROME

Italy's public deficit grew more than expected last year, reaching 7.4 percent of gross domestic product (GDP), once again the highest in the European Union, revised official figures have shown.

The Istat national statistics agency had released a preliminary estimate in March, reporting a deficit of 7.2 percent of GDP, following that of 8.6 percent in 2022.

The upward revision is due to the higher-than-expected cost of the generous "Superbonus" tax incentive aimed at improving home energy efficiency, Istat experts said Monday during a hearing in Parliament.

The incentive, to be used for projects ranging from thermal insulation to solar panels, was launched in May 2020 under then-premier Giuseppe Conte to stimulate economic activity in the midst of the coronavirus pandemic.

But combined with other bonuses aimed at supporting the construction sector, the total cost has already reached 219 billion euros, or a tenth of GDP, according to calculations by the government of Prime Minister Giorgia Meloni.

Following Italy, Hungary and Romania had the highest deficits in the European Union last year, at 6.7 percent and 6.6 percent of GDP respectively, Eurostat said Monday.

Eleven member states recorded a deficit greater than 3.0 percent of GDP, the ceiling set by eurozone budget rules.

Italy's public debt was 137.3 percent of GDP last year, the highest in the EU after Greece at 161.9 percent.

Italy also had the highest EU deficit in 2022 and 2021, according to Eurostat, although in 2020 Spain was at the top of the list.