The current ratio of public debt/GDP has nearly reached the all-time high experienced in the post-World War II period. Currently, the debt/GDP ratio is:
At the end of December 2018, Italy’s public debt was €2,316.7 billion, 132.1% of GDP. As one of the leading problem areas facing Italy and its economy, it has become a daily subject of public debate. In light of the slow-down in growth which many have estimated will be around 0% for 2019, the future debt/GDP ratio could even rise to over 133%.
To understand the implications, risks and uncertainty factors, it is necessary to understand its nature. Therefore, the goal of this study is to provide a brief analysis of its evolution through a description of the political economic maneuvers followed by the 65 administrations that have run the country and their impact on government debt, by providing a picture of their structure, primary risk and sustainability factors, and discussing the potential impact on the productive system and for Italian families. In conclusion, a number of considerations regarding the strategies required to reduce the negative impacts on the Italian economy and productive system will be offered.
This study is a continuation of the content and analysis The European House – Ambrosetti presented during the 2018 Finance Workshop entitled “The End of Quantitative Easing in Europe and the Consequences for Business and the Public. Impact on Italy’s Public Debt and Proposals for its Management”, and updated and expanded for the “Intelligence on the World, Europe and Italy” Forum held in Cernobbio at Villa d’Este.
Managing Partner and Chief Executive Officer,
The European House - Ambrosetti