Italy\'s Govt Debt Reaches Record High

The debt of the Italian government reaches a new records

Rome 17 August : Inflicted by the weaker euro and higher prices, Italy’s debt has hit an all-time high by mid-year according to the Bank of Italy announced.
The Public Finance Supplement of the bank’s monthly bulletin that was released on Tuesday, stated that the total debt was 2.766 trillion euros ($2.812 trillion) the highest it’s seen in absolute terms.The figure is 1.9 percent higher than 2.714 trillion euros ($2.759 trillion) at the beginning of the year.

 Italy's Govt Debt Reaches Record High-TeluguStop.com

A weaker euro is one of the factors that contributed to the growing debt burden because the bulk of the debt of Italy is priced in euros.In the latter part of June, when the information in the Bank of Italy report was calculated the euro and the dollar started trading on a roughly the same level with the value of the dollar exceeding the price of the euro several times in July.

Price increases have been a mixed cause of the rising public debt, according to the Bank of Italy said.

Prices have increased, pushing tax revenues up The Bank of Italy report said tax revenues have increased by 11.9 percent in the first six months of the same time period in 2021 and added an additional 23.2 billion euros ($23.6 billion) to the government’s coffers.

But the rising cost of living coupled with other factors like the uncertainty of politics in the country as well as concerns about the economic consequences of the Ukraine crisis have driven bond yields to the highest levels since 2014.As of Tuesday the yield of Italy’s 10-year government bonds was 3.135 percent.It’s down from the peak of more than 4 percent in the middle of June, but up from 1.089 percent at the beginning of the year.

Higher yields on bonds, which is an indication of investor anxiety about the economic outlook of a country and increase the cost for government to borrow money.

The increase in public spending is a important reason for the rise in the country’s debt burden The government has taken measures to assist the country get away from the negative economic effects of the pandemic Covid-19.

One of the factors that has helped Italy’s debt situation this year is the growth of tourism.According to the Italian JFC Observatory, tourist tax revenues have increased by almost 80 percent to date this year, compared to the same timeframe in 2021 after the sector recouped from the travel restrictions that came with the pandemic.

int/shs

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