Italy's Fiscal Milestone

In a surprising turn of events, Italy recorded a public budget surplus of 0.4% of its GDP in the fourth quarter of 2024, as reported by the national statistics agency Istat. This marks a significant improvement from a 6.6% deficit in the same period of 2023, signaling a robust economic recovery.

Primary and Current Balances Show Strength

The country's primary balance surged to a positive 4.1% of GDP, a dramatic shift from a 2.8% deficit the previous year. Similarly, the current balance improved to 5.9% of GDP, underscoring the nation's fiscal health.

Revenue Rises as Expenditures Fall

Total public revenue climbed to 55.4% of GDP, while expenditures decreased to 55%. This reduction was partly due to a significant drop in capital outlays, reflecting tighter fiscal management.

Challenges Remain

Despite these positive indicators, household savings and real disposable income each fell by 0.6% from the previous quarter. This decline highlights ongoing inflationary pressures and weak consumption trends, reminding us that Italy's path to full recovery is still fraught with challenges.