Public Debt Forecast for Italy: Anticipating Increases Over the Next Five Years

Global Economy Struggles with Rising Debt

The world is grappling with a significant economic slowdown, accompanied by soaring public debt levels.
This critical situation arises precisely when economies need to deploy maximum monetary and fiscal support.
Historically, the need for “bazookas”—not merely monetary but fiscal measures—has never been clearer.
However, the stark reality is that funds are running low, particularly after government initiatives to alleviate the devastating impacts of the COVID-19 pandemic and tackle soaring energy costs following Russia’s invasion of Ukraine on February 24, 2022.

As a result, governments are heavily indebted, especially in G7 nations.
Countries like Italy, Germany, France, the United States, the United Kingdom, Japan, and Canada find themselves wrestling with public finances.
Some have faced long-standing challenges, while others have seen their situations worsen due to expansive fiscal policies introduced lately.

Debt Trends in G7 Nations

Visual Capitalist recently updated the current state of public debt, highlighting predictions for G7 economies.
Forecasts for the next five years (2024-2029) suggest varying trajectories for the debt-to-GDP ratios.
Will these nations manage to implement necessary reforms? The term “homework” often heard in Eurozone discussions emphasizes the countries’ obligation to comply with new stability pact regulations.

With France losing its fiscal health—illustrated by a recent downgrade from Fitch Ratings—and Germany compelled to increase its borrowing to prevent economic collapse, a rebound in public finances seems challenging in Europe.
Nonetheless, such recovery is imperative under the new EU Stability and Growth Pact rules.

Debt to GDP Ratios: Insights and Predictions

According to data from the International Monetary Fund (IMF) compiled by Visual Capitalist, comparing current figures to projections for 2029 reveals potential decreases in the debt-to-GDP ratios for some countries.

For example, Japan, which often faces rising debt levels, is projected to reduce its ratio from 254.6% to 251.7%, achieving a 2.9 percentage point decline.
Conversely, Italy’s substantial debt load is expected to rise from 139.2% to 144.9%, an increase of 5.7 percentage points.
Meanwhile, the United States’ debt ratio could surge by 10.6 points, reaching 133.9% from 123.3%.

In 2023, the U.S.
owed approximately $33.2 trillion, summing up to a third of global government debt, escalating further towards a record $35 trillion by July.
France’s debt situation is likewise deteriorating, with its ratio anticipated to rise from 111.6% to 115.2%, an increase of 3.6 percentage points.

On a brighter note, Canada expects its debt-to-GDP ratio to dip below 100%, improving from 104.7% to 95.4%, a significant decrease of 9.3 percentage points.
The UK’s ratio, however, is set to climb by 5.8 points, from 110.1% to 104.3%.
Lastly, Germany is projected to maintain its relative fiscal health, with its ratio decreasing by 6 percentage points from 63.7% to 57.7%.