April 8, 2013 / 3:11 PM / 5 years ago

Italy public debt to rise 3 points after paying company credits

BRUSSELS, April 8 (Reuters) - Italy’s public debt will rise by at least three percentage points over the next two years due to the government’s plan to pay some 40 billion euros of debts owed by the state to private suppliers, Economy Minister Vittorio Grilli said.

Italy’s debt stood at 127 percent of output at the end of last year, the second highest in the euro zone after Greece.

Grilli told reporters after meeting European Economic and Monetary Affairs Commissioner Olli Rehn in Brussels that the impact of the government’s decree “could be a bit more” than three points by the end of 2014.

In other remarks, Grilli said stagnant domestic demand in Italy was unlikely to post any recovery as long as the political situation remains deadlocked in the wake of February’s inconclusive national election.

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