As with Greece, Spain, Portugal and Ireland, I warned thoroughly and quite early that Italy will deliver a rash of broken promises in regards to it public finances leading up to a probably restructuring. Today's MSM headlines simply confirm more of the same, just two years later...
Italy will miss its budget deficit targets in 2012 and 2013 and its public debt will rise in both years despite the government's austerity measures, the International Monetary Fund forecast on Tuesday.
The IMF said in its Fiscal Monitor report that Italy's deficit would fall this year to 2.4 percent of output, well above Rome's 1.6 percent target, and would decline to 1.5 percent in 2013, when Italy is aiming to balance its budget.
The forecasts are a blow to Prime Minister Mario Monti, whose popularity is sliding and whose reform efforts are meeting rising criticism and resistance as the country's borrowing costs rise.
Italy's huge public debt, the second highest in the euro zone after Greece's as a proportion of GDP, will jump to 123.4 percent of gross domestic product this year, from 120.1 percent in 2011, and edge up to 123.8 percent in 2013, the IMF said.
Earlier on Thursday the IMF forecast the Italian economy would shrink by 1.9 percent this year and contract by 0.3 percent in 2013.
The Fund's forecast that Rome will significantly overshoot its balanced budget target next year will put pressure on Monti to adopt additional corrective measures, though the IMF itself has urged against this due to the weak economy.
Here are the first four pages of our subscriber research released in March 2010, sans the Italian crystal ball of course. Subscribers, please reference Italy public finances projection.
We should all keep in mind that Contagion Should Be The MSM Word Du Jour, Not Bailouts and Definitely Not Greece! The following are what we consider to be the focal point of sovereign debt stress if things continue to kick off.
- Report_122511 - Professional/Institutional edition (Insurers, Insurance & Risk Management)
- Report_122511 -Retail edition (Insurers, Insurance & Risk Management)
Bank report 170610 Retail07/07/2010
Bank Holdings_Report_04August2008 - retail09/16/2008