By Giuseppe Fonte
ROME, April 28 (Reuters) – Italy’s budget watchdog, UPB, raised doubts on Tuesday over the government’s pledge to put the country’s massive debt on a downward path starting from 2027.
In its multi-year budget plan unveiled this month, Italy saw its debt rising from 137.1% of GDP in 2025 to 138.6% in 2026, before marginally declining to 138.5% in 2027, to 137.9% in 2028 and to 136.3% the following year.
“The debt reduction path could prove less successful, particularly if the downside risks associated with the international environment were to materialise,” UPB chairperson Lilia Cavallari told lawmakers, referring to surging energy costs due to the U.S.-Israeli conflict with Iran.
UPB carried out 5,000 statistical simulations based on temporary shocks to key macro‑financial variables such as GDP growth, inflation and interest‑rate trends.
“Around half of the statistical simulations produce less favourable outcomes than those predicted by the government,” Cavallari said.
Under a ‘worst-case scenario’, Italian debt-to-GDP ratio would rise to around 140% this year, she added.
UPB also warned the debt would rise to 139.2% of national output in 2027, rather than fall to 138.5%, should the government fail to meet its asset sale programme.
The Treasury said projections for the debt-to-GDP ratio factored in asset sales worth 0.2 percentage points this year, 0.5 points in 2027 and 0.1 in 2028, totalling just under 20 billion euros ($23.39 billion) over the three-year period.
UPB has expressed scepticism about these estimates, noting that Italy failed to reach previous revenue goals from privatisations.
Since she took office in late 2022, Prime Minister Giorgia Meloni collected just above 4 billion euros by selling 52.5% of bailed out Monte dei Paschi di Siena and 2.8% of energy group Eni, through several share placements.
Italy’s independent audit court has said in recent years that sell-off plans may be substantial “window dressing”, aimed at painting a more promising budget picture.
Even assuming the government’s forecasts for the asset sales are achieved, Italy is set to become the euro zone’s most indebted country this year, replacing Greece.
($1 = 0.8551 euros)
(Editing by Alvise Armellini and Chizu Nomiyama )
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