Italy's public debt reaches record €2.3 trillion

Italy's public debt reaches record €2.3 trillion

Italy's public debt climbed for the fifth consecutive month in July to reach a new high of 2.3 trillion euros, the country's central bank said on Friday.

The debt rose 18.6 billion euros in July from August, the Bank of Italy reported in its monthly bulletin.

Italy is saddled with the euro area’s second-biggest debt load after Greece. However, the economy has expanded for the past 10 straight quarters and sustained the pace of growth in the last quarter, inflation has picked up and bond yields have fallen, meaning economic output could rise more than the public debt this year.

Italy’s main business lobby Confindustria on Thursday predicted that debt would decline slightly in 2018 to 131.8 percent of GDP from 132.6 percent this year, prompting finance minister Pier Carlo Padoan to state: "The economy looks like it's getting back to normal."

Confindustria also raised its growth outlook to 1.5 percent in 2017 but forecast a slightly lower growth of 1.3 percent next year.

The Italian treasury is due to issue new forecasts next week.