The Italian economy grew by 0.9 percent last year, up slightly on the government's forecast, but the budget deficit was far higher than expected, national statistics agency ISTAT said Friday.

Gross domestic product (GDP) increased by 0.9 percent on the back of strong domestic demand in 2023, slightly more than the 0.7 percent initially forecast by the agency in January.

The budget deficit came in at 7.2 percent of GDP, down from 8.6 percent in 2022 -- but much higher than the official target of 5.3 percent.

Prime Minister Giorgia Meloni's hard-right government has blamed the so-called Superbonus, an incentive scheme for energy-saving home improvements brought in by a previous administration.

"The haemorrhaging of the irresponsible Superbonus period has had a heavy effect on 2023, unfortunately going beyond the already pessimistic outlook," Finance Minister Giancarlo Giorgetti said Friday.