After years of imbalanced imbalances from the pandemic, from the energy crisis and the increase in interest rates, 2024 marked a turning point: the net debt of public administrations has been significantly reduced, passing from -7.2% of 2023 to -3.4% of GDP.
The new data on national economic accounts, released by Istat on 22 September 2025 and relating to the two -year period 2023/2024, offer an interesting photograph and, in many respects, encouraging the state of Italian public finances.
What the data on the net debt of the PA tells us
The data released by Istat tells us that the net debt of public administrations in Italy recorded a significant improvement in 2024, the year in which the deficit/GDP ratio fell to -3.4%, approaching the threshold of 3% foreseen by Maastricht’s convergence criteria.
In 2023, in fact, the deficit was equal to -7.2% of GDP, a high level, linked both to the post -pandemic effects and the impact of extraordinary measures to support the economy and families.
This means that, while remaining in deficit, the Italian state has strongly reduced the imbalance between revenue and expenses.
Another key figure is the primary balance (i.e. the deficit net of the expenditure for interest on debt), which in 2023 was negative, equal to -3.5% of the GDP, while in 2024 it returned positive to +0.5% of the GDP.
This confirms that Italy in 2024 has collected more resources than expense. So what do these numbers tell us?
First of all that public accounts are improving in terms of sustainability, thanks also to a moderate increase in GDP and a more careful management of expenditure.
However, the weight of the interest on the debt remains high and together with the tax burden represents the main obstacle to a structural and lasting rebalancing.
The effect of interest expenditure and tax burden
The improvement of the accounts, however, is not without shadows.
Interest expenditure increased by 10.1%, reflecting the effect of the restrictive monetary policy of the European Central Bank.
The increase in rates has made the Italian public debt service more expensive, which remains among the highest in the world in relation to GDP.
In parallel, the tax burden has grown by more than one percentage point, showing up on the levels recorded in 2020/2021.
The rebalancing of public accounts, therefore, was obtained (at least in part) through an increase in the tax burden, rather than through a structural reduction in expenditure or a significant expansion of the tax base linked to a robust growth.
For this reason, the risks must not be underestimated.
First of all, economic growth remains modest and not uniform between the sectors, with a stagnant industry that could ballast the future GDP trend.
It is also true that the expenditure for interest, intended to remain high until the rates return on lower levels, will continue to subtract resources from productive investments and social policies.
The increase in the tax burden risks weighing on consumption and investments, at a time when it would be essential to relaunch the internal demand.
The challenge of structural reforms
To consolidate the progress made, Italy cannot be limited to celebrating the halving of the deficit. A long -term strategy is needed that points to a more robust and sustainable growth.
This means intervening on structural reforms, to improve the efficiency of the public administration, simplify the regulatory framework for companies, encourage technological innovation and support the ecological transition.
In this sense, the PNRR funds still represent a crucial opportunity, but must be used quickly and competence, avoiding delays that risk frustrating their impact.
At the same time it is necessary to rethink public spending to make it more targeted and effective, reducing waste and privileges in favor of investments that can really increase the productivity of the country system.
