Italy's economic growth last year was weaker than initially estimated, but on a positive note for the government, the budget deficit and public debt as a share of GDP were revised downward, according to a report from national statistics bureau ISTAT on Monday.

These revisions provide some relief to Prime Minister Giorgia Meloni as she prepares the 2025 budget, which will require significant deficit reductions to meet Italy's commitments to the European Union.

According to a government official, the revisions could prevent a previously anticipated rise in the debt-to-GDP ratio over the next few years, Reuters reports.

Moreover, ISTAT also slightly adjusted the 2023 budget deficit forecast down to 7.2% of GDP from the earlier estimate of 7.4% made in April, which had been the highest in the eurozone.

Italy, which was placed under an Excessive Deficit Procedure by the EU in June, aims to reduce its deficit to 4.3% of GDP this year, with plans for further declines to 3.6% in 2025 and 2.9% the following year.

ISTAT revised the public debt level for 2023 to 134.6% of GDP, down from 137.3%. Italy's debt remains the second highest in the eurozone, following Greece.

The revisions were part of ISTAT's annual review of Italy's GDP statistics, which takes place every September. This year, the review also included a change in the base year for GDP growth data from 2015 to 2021.

Consequently, the level of GDP for 2023 was increased by €46.6 billion to €2.13 trillion.

Yet despite the upward adjustments to the GDP level, the growth rate for 2023 was revised down to 0.7% from the previously reported 0.9% due to changes in earlier years' data. 

The statistics office also updated the country's GDP, deficit, and debt figures for 2022 and 2021.

Growth for 2022 was increased to 4.7% from the previously reported 4.0%. The budget deficit was adjusted down to 8.1% of GDP from 8.6%, and the debt was revised lower to 138.1% from 140.5%.

According to ISTAT, the upward revisions to GDP across several years mean that Italy's GDP at the end of 2023 is now, for the first time, above its level prior to the 2008 financial crisis.

The Italian Treasury, originally scheduled to prepare a multi-year budget plan last week, opted to postpone this task until after the publication of ISTAT's revisions to assess their impact on public finances.

The plan must be submitted to Brussels by early October, following approval from the government and parliament.