Italy says state finances can absorb Middle East crisis

The government of Italy is prepared to manage the economic consequences of the Middle East crisis, according to Economy Minister Giancarlo Giorgetti. As the administration prepares to update its budget targets and growth projections for 2026 and subsequent years, Giorgetti signaled that the nation's fiscal foundation is stable. > "We are facing this crisis from a position of relative strength because the numbers of our economy are not exceptional, but they are certainly positive." Speaking at a finance conference in Cernobbio, the minister noted that he is awaiting a potential revision of last year's deficit figures from the national statistics office, ISTAT. A reduction from 3.1% to 3.0% of national output would allow the country to exit the European Union's excessive deficit procedure ahead of schedule. For the current year, the Treasury has established a deficit-to-GDP target of 2.8%. Economic growth projections are seeing slight adjustments. Sources indicate that the government now expects GDP to expand by 0.5% or 0.6% this year, followed by 0.7% in 2027. These figures are marginally lower than the 0.7% and 0.8% targets previously set in September. These updated forecasts, expected to be finalized by April 10, do not yet account for potential new stimulus measures intended to help businesses and households manage energy costs. Despite the geopolitical tensions involving Iran, Giorgetti emphasized that the state is prepared for potential shocks. > "State finances are currently in a position to absorb the shock of the Iran war." Regarding energy security, the minister confirmed that there are currently no shortages in supply. The government has already committed approximately 417.4 million euros to lower fuel excise duties through April 7. While industry groups continue to advocate for more aggressive intervention, Giorgetti stated that the government remains open to dialogue with various sectors to address the most urgent economic concerns.