OECD projections suggest that Italy’s public deficit will reach 6% of gross domestic product [GDP] in 2010, with debt over 115% of GDP and rising, even with some effort at fiscal consolidation.
Public debt and interest rates
From OECD: The interest rate differential between Italian and German 10-year public debt widened from 35 basis points in 2007 and stood at between 140 and 150 basis points in March 2009..With Italy’s high level of debt, the widening differential is a warning that investors are increasingly concerned about fiscal risks.
Graph: OECD
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