Italy faces fiscal strain as public debt climbs to €3 trillion

Italy's public debt has reached a record-breaking milestone, crossing the three trillion euro mark for the first time in history.

According to new figures from the Bank of Italy, the debt increased by nearly 23.9 billion euros in November 2024, rising from 2.981 trillion euros in October to a staggering 3.005 trillion euros, Caliber.Az reports via foreign media.

The data, which is typically released with a one-month delay, reveals that the growth in public debt was driven by a significant rise in the Ministry of Finance's liquid assets. These assets surged from 20.9 billion euros to 63.9 billion euros, reflecting the government's increased need for immediate funds. Additionally, the increase was partly attributed to higher costs associated with public administration, which saw an additional 3.2 billion euros in spending.

This new record marks a continuation of Italy’s rising debt, which has been a growing concern for policymakers. The public debt-to-GDP ratio in Italy remains one of the highest in the European Union, second only to Greece, and is among the largest in the world. As of the end of 2023, Italy’s debt-to-GDP ratio stood at 134%, a slight decrease from the pandemic peak of 2020 but still a significant burden for the economy.

Italy's soaring public debt underscores the fiscal challenges the country faces as it grapples with rising costs, social spending, and efforts to stabilize its economy after the disruptions caused by the COVID-19 pandemic. With the country continuing to spend heavily, especially in public administration and financing government operations, the need for long-term fiscal reforms remains urgent.

By Tamilla Hasanova