Italy’s debt to hit record 158.5% of GDP in '21, 2nd-highest after Greece in bloc

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Italy’s debt to hit record 158.5% of GDP in '21, 2nd-highest after Greece in bloc

The Italian Coalition Government of left-leaning populist “Five Star Movement” and centre-right populist “League,” led by PM Giuseppe Conte, have been well poised to witness a record rise at its public debt in 2021 what Government officials claimed could exceed a previous target of 155.6% of GDP (Gross Domestic Product) set in the September of 2020, a press agency report published earlier on Saturday had unveiled citing senior Government officials who wished to remain anonymous given the scale of sensitivity of the subject-matter.

In point of fact, the bloc’s fourth-largest economy, Italy, which had borne the heaviest brunt from a global-scale pandemic outbreak earlier in 2020, would forecast a record upsurge of its public debt to 158.5 per cent of its GDP (Gross Domestic Product), setting out a new post World War II record level what would be the second-highest in the 26-member eurozone after that of Greece, the Government officials said.

Nevertheless, latest forecast from the Italian Government which is scheduled to be updated in April, came against the backdrop of an abrupt spike in pandemic associated costs as the Government had announced a new stimulus package worth of €32 billion this week that in effect would heave up the Government’s 2021 budget deficit to at least 8.8 per cent of GDP, up from a prior estimate of 7 per cent released later last year.

Italy sees public debt soaring to a new record level in 2021

More importantly, while a €32 billion in additional stimulus package revealed this week would add further strains in to a debt-strapped Italian economy, which is expected to rebound 5.2 per cent this year following a havoc-scale contraction of 10.6 per cent in 2020, the extra spending would be capitalized on a swathe of pandemic-hit sectors ranging from a hard-pressed national health service to a raft of small-scale businesses which had been forced to furlough tens of thousands of employees, while the stimulus package would also cover a postponement in corporate tax payment deadline, said the Government.

Nonetheless, although the nation’s 2021 public debt would more likely to soar to a new record level, 2020 debt-figures could come below a prior estimate, the press agency report revealed quoting one of the Government Officials.