Finance

Finance

Italyâ€™s public debt hits record

05 March 2012 10:31 (UTC +04:00)

Baku - APA-Economics. Italy’s economy rose 0.4% last year, at a much slower pace than in 2010 as a weaker global economic growth and weak domestic consumption took their toll, but it reported a budget surplus for the first time since 2008, national statistics agency Istat said Friday.

Italy’s public debt increased to 120.1% of GDP at the end of 2011, Istat said, using Bank of Italy data. This compares with a slightly upwardly revised 118.7% the year before, an Istat official said.

The debt figure is the highest since the 120.2% posted in 1996, said the official.

Another figure that was revised upwards is a break-even for 2010 budget, from an earlier reading of 0.1% deficit, Istat said.

The preliminary figures indicate that Italy ran a primary budget surplus of EUR15.66 billion, or 1.0% of GDP, it said.

Primary budget balances reflect the difference between government spending and revenue net of interest payments on the national debt.

Overall fiscal pressure on the Italian economy slightly declined to 42.5% of GDP in 2011 from 42.6% in 2010, Istat said.

Italy’s economic growth last year was driven by a 1.2% expansion of the industrial sector, a 0.8% growth by the service sector and a 3.5% contraction in the construction industry, according to Istat’s new data.

Household spending rose 0.2% while overall spending by the public administration contracted by 0.9% in real terms in 2011 from the previous year, Istat said.

Gross fixed investments fell 1.9% while exports rose 5.6%, Istat said. There was no net inventory effect on Italy’s GDP figure, but net foreign trade--the gap between changes in export and import volumes--added 1.4 percentage point to the final figure, the institute added.