Brandolini warns higher deficits burden Italy's high debt
Bank of Italy official Andrea Brandolini told parliamentary budget committees that the draft budget adds €13.1 billion annually to deficits in 2027-28. Selected tax and transfer measures raise household disposable income by about 0.5 percent in 2027.
Temporary spending widens the deficit
Brandolini, head of the Bank of Italy's Economics and Statistics Department, said official projections put Italy's deficit at 3.4 percent of GDP in 2027, 3.2 percent in 2028 and 2.3 percent in 2029.
The return below 3 percent partly depends on temporary measures expiring.
Additional defence resources average almost €5 billion annually in 2027-28, falling below €1 billion in 2029.
Energy measures receive €3.8 billion, €6.8 billion and €2.7 billion respectively.
National Health Fund allocations reach €146.3 billion, €147.1 billion and €148.2 billion.
The economic backdrop remains unstable: GDP stagnated in Q3 2026, while annual harmonised inflation reached 5.6 percent in October.
Brandolini identified downside growth risks and upside inflation risks.
Financial firms bear the levy
Banks and insurers face additional taxes of €4.4 billion in 2027, €2.5 billion in 2028 and €0.8 billion in 2029.
These combine accelerated receipts with permanent and temporary tax increases.
Another doubling of financial transaction tax rates raises €1.4 billion annually; the regulated-market equity rate reaches 0.4 percent.
Spreading 2027 Superbonus tax credits over ten years reduces borrowing needs and debt by €18.5 billion that year, but adds almost €2.1 billion annually in 2028-36. Brandolini warned of effects on intermediaries' accounts and firms' liquidity.
Complexity carries a cost
Brandolini judged discretionary deficit increases costly for a highly indebted economy facing high interest rates.
He said the budget modestly benefits households but further complicates personal taxation.
He favoured concentrating resources on growth potential and preserving predictable tax rules.