Italy expects its debt to spike to a new post-war record level of 158.5 percent of gross domestic output (GDP) this year, exceeding the 155.6 percent target it set in September, government sources told Reuters on Saturday.
The new estimates reflect the impact of the 32 billion euro ($ 39 billion) stimulus package announced this week, which will push the 2021 budget deficit to 8.8 percent of national production, up from the 7 percent previously targeted.
The extra spending will be used to help struggling national health services, grants and leave schemes for businesses forced to close due to the coronavirus lockdown, and provide protection for postponing tax deadlines.
The government will renew its debt and deficit targets in April.
Rome’s massive public debt is the second highest in the eurozone after Greece.
Despite the higher forecast for 2021, however, the debt figure for 2020 is expected to be lower than previous estimates, said the source, asking not to be named.
Rome now expects its 2020 debt-to-GDP ratio to be 156.5 percent, below the official target set in September of 158 percent, previously the highest level since World War II. The 2020 deficit is seen between 10.5 percent and 10.8 percent of national output.
The final deficit and debt figures for the last year will be published by the national statistics bureau ISTAT in March.