MNI: Italy Public Debt Climbs to E2.284 Trn in Sept - CenBank

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

By Silvia Marchetti

     ROME (MNI) - Italy's public debt climbed to E2.2837 trillion in September,

registering a monthly E4.4 billion rise, but state revenues in the first nine

months of this year were 1.6% higher than in same period 2016, the Bank of Italy

said Wednesday. 

     In its latest monthly statistical report, the central bank acknowledged the

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

country and 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 Continent's second-largest

debt by volume. 

     Following a rosier growth outlook, forecast at .5% of GDP this year, the

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

previous April data, debt forecasts have been cut to 130% of GDP 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 to be reached only in 2020,

according to Italy's Treasury. 

     Italy thus remains under scrutiny of the European Commission for its

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

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

onto possible fines. 

     Brussels has requested Rome implement 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 Commission has, however, acknowledged Rome's efforts in balancing

growth targets and fiscal sustainability. The EC has said it will take into

account reform and budgetary efforts when delivering a first assessment of

Rome's 2018 budget law at the end of November.

     According to the BOI report, the September increase in debt was partly

compensated by an E11.3 billion fall in the Treasury's liquid assets to a

current E52.1 billion level, and by the overall effect (E0.7 billion) of the

revaluation of inflation-protected securities and variations in exchange rate. 

     In September, monthly state revenues stood at E28.2 billion, E3.8 billion

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

revenues amounted to E306.8 billion, registering a 1.6% annual rise, said the

central bank. 

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

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