Italian official public deficit jumps to 3.3 per cent of output
(MILAN) - Italy's public deficit grew to 3.3 percent of gross domestic product in the third quarter, compared with 1.3 percent 12 months year earlier, the national statistical institute Istat said on Friday.
Over the first nine months of the year the deficit rose to 5.2 percent of gross domestic product (GDP) compared with 2.8 percent a year earlier.
European Union rules put the ceiling for state, welfare and local authority deficts at 3.0 percent of output and say that in times of growth countries should move into surplus.
During the economic crisis, several countries have increased their annual public deficits far above this limit, and in some cases the national debt had also shot up.
Istat said that a fall in tax revenues and an increase in spending, as a result of the crisis, explain the jump in the public deficit.
In the third quarter, tax revenues fell by 2.1 percent on a 12-month comparison and spending increased by 2.3 percent, whilst over the first nine months of the year, revenues reduced by 2.4 percent and spending was up by 2.7 percent.
The primary balance, which excludes interest payment and debt redemption, was positive in the third quarter (0.6 percent of GDP), but negative over the first nine months (-0.8 percent).
The figures are gross therefore highly variable from one quarter to the next, and the calculations are not exactly the same as those notified to the European Commission because they do not include so-called swap operations involving financial instruments.
The latest forecast by the Italian government foresees a public deficit of 5.3 percent of GDP in 2009, from the 2.7 percent in 2008. In 2010 it should be 5.0 percent.
According to the forecast, Italian public deficit should come back under the 3 percent limit in 2012.
In order to raise tax revenues the government has adopted a tax amnesty measure on capital assets concealed abroad.
So far the amnesty has allowed the repatriation or regularisation of 95 billion euros, which has brought nearly 5 billion euros to state coffers.
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