Italy’s 2010 deficit narrowed more than expected

March 3, 2011 - 0:0
Italy’s budget deficit fell more than economists forecast last year and public debt as a percentage of gross domestic product rose to the highest on record as the economy recovered from a recession. The shortfall declined to 4.6 percent of GDP compared with a revised 5.4 percent in 2009, Rome-based national statistics office Istat said on Tuesday. That was lower than the 5 percent median forecast of 7 economists surveyed by Bloomberg News. Debt rose to 119 percent, while GDP advanced 1.3 percent on an annual basis after contracting a revised 5.2 percent in 2009. Prime Minister Silvio Berlusconi’s government last year passed 11.6 billion euros ($16 billion) of budget cuts as Italy’s economy recovered from its worst recession since World War II. Lawmakers approved the same level of cuts for 2012 to reduce the deficit below 3 percent of GDP. Italy may miss its goal of reducing the deficit to below 3 percent if growth proves weaker than the government’s projected 1.3 percent in 2011, the Organization for Economic Cooperation and Development said in a report on Nov. 18. The 2009 deficit figure was revised from a previous reading of 5.3 percent. The 2009 GDP reading was previously reported as a contraction of 5 percent. (Source: Bloomberg)