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Business

Italy's sovereign debt bigger than expected

Italy has accumulated more debt in 2011 than previously thought, according to revised figures published by the country's statistics office. In the eurozone debt ranking, Italy now comes second behind Greece.

Italy's total national debt in 2011 was about 9 billion euros ($11.6 billion) higher than previously thought according to the country's Statistics Office, Istat, which released revised debt figures on Thursday

As the country's mountain of debt reached 1.909 trillion euros in 2011, Istat revised the ratio of debt to gross domestic product (GDP) from 120.1 percent to 120.7 percent. In the debt-laden eurozone, only Greece has a worse debt-to-GDP reading for 2011, at 160 percent.

Government debt as a percent of GDP is used by investors to measure a country's ability to make future payments on its debt, thus affecting the country borrowing costs and government bond yields.

Italy's figure is more than twice as high as is allowed under the European Stability Pact, which demands national debt levels to remain below 60 percent.

However, Italy's indebtedness was expected to increase to 126 percent next year, the government said. The rise will come despite an expected fall in Italy's public deficit to 2.6 percent of GDP this year, and 1.8 percent in 2013.

uhe/sej (Reuters, dpa)

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