The Treasury's annual Economic and Financial Document (DEF) approved by Giorgia Meloni's cabinet set the 2023 fiscal deficit at 4.5 per cent of gross domestic product, up from a 3.4 per cent forecast made by the previous government of Mario Draghi in September.

The new figures give Meloni room for measures worth roughly 1.1 per cent of GDP to expand the economy next year, while keeping the deficit-to-GDP ratio on a downward trajectory from one year to the next.

This year's ratio is hiked to 5.6 per cent from 5.1 per cent, allowing Meloni, who took office last month at the head of a conservative coalition, to immediately take steps to tackle the problem of surging gas and electricity bills.

Meloni told reporters she would spend more than nine billion euro on an anti-inflation package in a decree next week.

"For 2023 ... we are freeing up 22 or 23 billion (euro) which will also be used exclusively to address the energy question," she said at a news conference.

After winning a September 25 election, the far-right leader quickly made clear that most of her coalition's more ambitious election pledges such as tax cuts and higher pensions would have to wait until economic conditions had been ameliorated.

The government raised Italy's GDP growth forecast for this year from 3.3 per cent to 3.7 per cent on the back of stronger than expected expansion in the third quarter, while leaving the 2023 forecast unchanged at 0.6 per cent.

Economy Minister Giancarlo Giorgetti, speaking at the same news conference, said recession risks were growing in Europe "and could also touch the Italian economy".

The Treasury's targets will form the framework for the 2023 budget Meloni will present to parliament later this month.

Public finances this year have gone better than forecast, with value-added tax revenues and excise duties boosted by inflation and surging energy prices.

Inflation, which under the EU-harmonised index hit 12.8 per cent in October ― the highest reading since the series was introduced in 1996 ― has also helped cut Italy's huge public debt.

The European Union's fiscal rules are still suspended to help the bloc's economies recover from the COVID-19 pandemic, giving Meloni invaluable breathing space.

Giorgetti said Italy's public debt, proportionally the highest in the euro zone after Greece's, will fall steadily from the 150.3 per cent of GDP level registered in 2021 to 141.2 per cent in 2025.

― With AAP.