MNI: Italy May Public Debt Climbs to E2.3274 Trln - CenBank

By Silvia Marchetti

     ROME (MNI) - Italy's public debt rose E14.6 billion in May to E2.3274

trillion, while state revenues stood at E155.2 billion over the first five

months of this year, the Bank of Italy said on Friday. 

     In its monthly statistical report, the central bank acknowledged the

continuing erratic pace at which public debt was rising, despite economic growth

consolidating.

     Rome's new government has pledged to pursue the public finance adjustment

path, despite initial mixed messages on the need to boost growth-orientated

spending. 

     Last year ended with a total E36.6 billion rise in Italy's debt. Despite a

few monthly ups and downs, for the first time in years however the rate of

country's public debt increase is at least slowing, with the debt curve

stabilizing. 

     The Eurozone's third-largest economy continues to be stifled by the union's

second-largest debt by volume. The previous Italian government raised debt

forecasts for this year to 130.8%, due to "exceptional, one-off" public rescues

of several ailing banks, but predicted debt to fall to 128% in 2019. 

     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. 

     --BRUSSELS BACKING - FOR NOW

     In May, the European Commission acknowledged Rome's efforts in curbing its

outstanding public debt and in balancing growth and deficit targets in 2017,

thus dropping for now the option of opening an "excessive macroeconomic

imbalance" procedure against Italy. 

     However, Brussels has announced it will, at some future date, look at the

sustainability of Italy's public finances for 2018, in order to properly weigh

the impact of the new government's fiscal objectives and budget plan, due in

September. 

     According to the BOI report, the May debt increase was due to a E5.4

billion rise in the Treasury's liquid assets to E57.6 billion, along with an

E7.6 billion borrowing requirement from public bodies. 

     The revaluation of inflation-protected securities and variations in

exchange rate contributed in debt increasing by E1.5 billion. 

     In May, monthly state revenues stood at E33.6 billion, while in the first

five months of the year a total E155.2 billion flowed into the public coffers,

slightly higher than in the same period of 2017, the central bank said. 

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

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