Bank of Italy: the debt increases. EU cuts Italian GDP estimates

The Italian public debt stood at 2,755.4 billion in March, up by 18.9 billion compared to the previous month. This was announced by the Bank of Italy, underlining that the increase is due to the borrowing requirement (22.8 billion), which more than offset the reduction in the Treasury’s liquidity (6.4 billion, to 95.6); the overall effect of spreads and premiums on issue and redemption, the revaluation of inflation-linked securities and the change in exchange rates increased the debt by € 2.4 billion. Tax revenues increased by € 33.2 billion, up by 10.2% (€ 3.1 billion) on March 2021. With reference to the breakdown by subsectors – informs the Bank of Italy – the debt of central administrations has increased of 18.9 billion; that of local administrations and that of social security institutions remained virtually unchanged.
At the end of March the share of the debt held by the Bank of Italy was 25.5 per cent (unchanged compared to the previous month); the average residual life of the debt remained stable at 7.6 years.
In March, tax revenues accounted for in the state budget amounted to 33.2 billion, an increase of 10.2 percent (3.1 billion) compared to the same month of 2021. In the first quarter of the year, tax revenues were amounted to 108.9 billion, up 13.5 percent (13.0 billion) compared to the same period last year.

The European Commission cuts Italy’s growth estimates: GDP is expected to drop to 2.4% in 2022 and slow to 1.9% in 2023, compared to 4.1% and 2.3% expected in February, due to the impact of Russia’s war on Ukraine weighing on supply chains and prices. In the spring forecast, Brussels reports that “most of Italy’s growth” for 2022 is “attributable to a carry-over effect” linked to the “rapid recovery” recorded in 2021. Due to the current geopolitical context “the prospects remain subject to pronounced downside risks “. The Italian deficit and debt, despite the war in Ukraine, “will continue to decline but remain high”. This is what we read in the spring economic forecasts of the EU Commission according to which, the Italian deficit, from 7.2% last year, in 2022 will amount to 5.5% to fall to 4.3% a year. following. Public debt, from 150.8% in 2021, according to European forecasts, will drop to 147.9% this year and 146.8% in 2023. “Current expenditure – it reads – has dropped significantly also in following the gradual abandonment of fiscal measures linked to the pandemic “. The inflation rate in Italy will touch 6% (standing at 5.9%, two percentage points less than the eurozone average) this year to then reach an average of 2.3% in 2023. This is what we read. in the spring forecasts of the EU Commission which revise the inflation rate upwards also for our country. Last February, in fact, the EU executive for Italy estimated an inflation rate at 3.8% in 2022, to then go down to 1.6% in 2023. The war in Ukraine has “exacerbated the bottlenecks in food supplies and pressure on existing costs “. The growth of the entire Eurozone will slow down to 2.7% in 2022 and to 2.3% in 2023. The European Commission writes in the spring economic forecasts, cutting the previous February estimates that gave GDP to 4% in 2022 and to 2.7% in 2023. Inflation instead flies to record levels: in 2022 it will reach 6.1% (against the 3.5% forecast in February), driven by energy prices. In 2023, an easing to 2.7% is expected. The Russian invasion of Ukraine “is exacerbating the headwinds that previously were expected to abate,” Brussels points out. This year Germany will record GDP growth of 1.6%, the lowest level among the 27 if we exclude Estonia, for which a 1% increase in GDP is expected, and the same indicated for Finland. This is the estimate formulated by the European Commission which thus cut by two points the forecast made last February, when Germany’s GDP growth was estimated at 3.6%.

Source: Ansa

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