Italy public debt hits new high of 2.3 trillion euros

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Europe

Italy's public debt has reached a new high of 2.3 trillion euros after climbing for a fifth consecutive month, the country's central bank said on Friday.

The debt rose by 18.6 billion euros in July from August, according to the central bank. The tax take equaled 233.1 billion euros in the first seven months of the year, down 1.2 percent compared to the same period in 2016, the bank said.

Italy is saddled with the euro area’s second-biggest debt load after Greece. However, the economy has expanded for the past 10 straight quarters and sustained the pace of growth in the last quarter, inflation has picked up and bond yields have fallen, meaning economic output could rise more than the public debt this year.

As the second highest public debt country in the European Union, Italy stood at 134.7 percent of GDP in the first quarter of this year, down from 134.8 percent in the same period in 2016, according to EU statistics agency Eurostat.

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This compares to an average debt-to-GDP ratio of 84.1 percent in the EU-28, according to Eurostat. The country with the lowest first-quarter debt was Estonia at 9.2 percent of GDP, Eurostat said.

Italy’s main business lobby Confindustria on Thursday predicted that debt would decline slightly in 2018 to 131.8 percent of GDP from 132.6 percent this year, prompting finance minister Pier Carlo Padoan to state that, "The economy looks like it's getting back to normal."

Confindustria also raised its growth outlook to 1.5 percent in 2017 but forecast a slightly lower growth of 1.3 percent next year.

The Italian treasury is due to issue new forecasts next week.

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