Italy's 2018 Debt Load Likely Rose Less Than Government Forecast
Italy's 2018 Debt Load Likely Rose Less Than Government Forecast
(Bloomberg) -- Italy’s debt load, the euro region’s second-biggest, rose last year but the increase was slightly smaller than the populist government had expected, Bloomberg calculations show.
The ratio of debt to gross domestic product reached 131.5 percent, according to Bloomberg calculations based on Bank of Italy figures released Friday. While that’s a slight increase from 2017, the ratio would be lower than the 131.7 percent estimated by the Treasury.
Successive Italian governments have said cutting the debt burden is a main priority. The European Union has repeatedly said a reduction is needed to boost the country’s economy.
Italy’s budget plan for this year and next, including a decline in the 2019 debt-to-GDP ratio to 130.7 percent, was reached in December after tense negotiations between Prime Minister Giuseppe Conte’s government and the European Commission.
Since then, the targets have been questioned by policy makers and economists across the region as new data showed that the nation slipped into a technical recession by contracting for a second successive quarter in the final three months of 2018. Only Greece has a higher debt-to-GDP ratio in the 19-nation euro area.
At a meeting of euro region Finance ministers in Brussels this week, Slovakia’s Peter Kazimir expressed his skepticism about Italy’s ability to respect its commitments.
“I’m a Catholic, so I believe in miracles, and that keeps me calm, even when it comes to Italy’s ability to deliver," the finance chief said.
The latest warnings come after the European Commission cut its 2019 growth forecast for the country to 0.2 percent from an earlier projection of 1.2 percent, the lowest pace among the euro zone’s 19 members.
To contact the reporters on this story: Lorenzo Totaro in Rome at ltotaro@bloomberg.net;Giovanni Salzano in Rome at gsalzano@bloomberg.net
To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Kevin Costelloe, Ross Larsen
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