MNI: Italy Public Debt Drops To E2.275 Trn In November - BOI

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

By Silvia Marchetti

     ROME (MNI) - Italy's outstanding public debt fell to E2.275 trillion in

November, lower by E14.7 billion on the previous month, while state revenues in

the first eleven months of the year were 1.8% higher than in same period of

2016, the Bank of Italy said Monday.

     In a monthly statistical report, the central bank acknowledged the erratic

pace at which public debt was falling 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.

     The Rome government is trying to further tightening public finances, as

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

second-largest debt by volume.

     --ROSIER OUTLOOK

     Following a rosier growth outlook, lifted to 1.5% 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% 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 scrutiny by European Commission over its outstanding

public debt, with Brussels concerned by potential stability risks linked to an

"excessive economic imbalance".

     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. 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.

     -REVENUES UP

     According to the BOI report, the November fall in debt levels reflects a

E20.2 billion decrease in the Treasury's liquid assets to a current E33.1

billion level, that has "more than compensated" the E6 billion borrowing

requirement of local authorities.

     The overall effect triggered by the evaluation of inflation-protected

securities and variations in exchange rate have contributed in containing debt

by E0.4 billion.

     In November monthly state revenues stood at E35.9 billion, E2.1 billion

higher than a year earlier. In the first eleven months of this year total

revenues amounted to E374.9 billion, registering a 1.8% annual rise, said the

central bank.

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

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