MNI DATA ANALYSIS: Italy Public Debt E2.2897 Trn In Oct - BOI

--Italy Jan-Oct State Revenues Rise On Year Ago Period

By Silvia Marchetti

     ROME (MNI) - Italy's outstanding public debt climbed to E2.2897 in October,

higher by E5.8 billion on the month, although state revenues in the first ten

months of the year were 1.3% higher than in same period of 2016, the Bank of

Italy said Friday. 

     In their monthly statistical report, the central bank acknowledged the

erratic pace at which public debt was rising as growth consolidates and the

public finances' adjustment path continues. 

     Despite a few monthly ups and downs, for the first time in years Italy's

debt seems to be on an overall downward trend. 

     Rome's government is trying to further tighten public finances, as Europe's

third-largest economy continues to be stifled by the EU's second-largest debt by

volume. 

     Following a rosier growth outlook, with GDP now seen at 1.5% this year, the

government recently revised its fiscal targets for 2017-2020. Compared to

previous April data, debt forecasts have been cut to 130% for this year from

previous 132.5%, to 130% in 2018 from 131%, to 127% in 2019 from 128.2%, and to

123.9% in 2020 from previous 125.7%. 

     However, the medium-term objective (MTO) of a structural balance has been

more than once delayed and it is now forecast be reached only in 2020, according

to Italy's Treasury. 

     Italy remains under the scrutiny of the European Commission for its

outstanding public debt due to potential stability risks linked to an "excessive

economic imbalance", which would lead to a deviation from fiscal targets and

onto possible fines. 

     Brussels has requested Rome implements additional fiscal measures to avoid

being sanctioned. 

     Italy's Finance Minister, Pier Carlo Padoan, has repeatedly reassured the

European Commission that Rome's government will further tighten public finances

by adjusting the structural balance by 0.3% of GDP in 2018. 

     The European commission has however acknowledged Rome's efforts in

balancing growth targets and fiscal sustainability. In November the EC gave a

first green light to Italy's 2018 budget but postponed its final assessment to

May, saying it will take into account both reform and budgetary efforts. 

     According to the BOI report the October increase in debt reflects local

bodies' E4.9 billion borrowing requirement and a E1.3 billion rise in the

Treasury's liquid assets to a current E53.3 billion level. The revaluation of

inflation-protected securities and variations in exchange rates have instead

contributed in containing debt by E0.4 billion. 

     In October, monthly state revenues stood at E32.2 billion, E0.4 billion

lower than a year earlier. However, in the first ten months of this year total

revenues amounted to E339 billion, registering a 1.3% annual rise, said the

central bank. 

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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