Italy′s public debt hits record high | Business| Economy and finance news from a German perspective | DW | 15.03.2012
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Italy's public debt hits record high

Italy's public debt reached a new high in the first month of 2012. Seasonal factors and higher costs of servicing accumulated debt were behind the increase, which hasn't prevented Italy from forays into bond markets.

Italy's public debt soared to another record in January, the Bank of Italy announced on Thursday. Overall debt reached an unparalleled 1.94 trillion euros ($2.47 trillion) in the first month of this year.

Month-on-month, the Italian public debt increased by 37.9 billion euros. The country's central bank attributed the renewed rise to a number of seasonal factors and higher costs of servicing debt.

It added that the country's contribution to the European financial rescue fund also made debt levels rise. The Italian public deficit hit 4 billion euros in January, up from 1.5 billion euros a year earlier.

Debt burden exceeds GDP

Statistics revealed that Italy's debt load is equivalent to 120.1 percent of the country's annual gross domestic product (GDP). The southern European nation is due to issue almost 450 billion euros worth of short and medium-term debt in the course of this year.

Despite the growing debt worries, market pressure has begun to ease at the start of 2012 as investors displayed growing confidence in the efficiency of the government's budget austerity measures.

Italy made another foray into bond markets on Wednesday when it borrowed 6 billion euros at reasonably low rates for three and seven-year bonds.

Rome received funds for three years at 2.76 percent and placed seven-year bonds at 4.30 percent, the Bank of Italy said in a statement.

hg/sms (AFP, dpa)