Italy deficit up on higher interest costs, low tax income

Italy’s deficit rose to eight per cent of gross domestic product in the first quarter of this year due to lower tax revenues and higher interest payments on debt, official data showed yesterday.

The deficit in the first quarter of 2011 had been seven per cent of GDP, the Istat data agency said.

It was Italy’s worst quarterly result since the 9.5 per cent reached in the first quarter of 2009 at the height of the global financial crisis.

Quarterly deficit figures in Italy are based on gross data and therefore vary widely from quarter to quarter.

Istat also said that the primary surplus excluding interest payments on debt of 2.6 per cent registered in the last quarter of 2011 had become a primary deficit of three per cent in the first quarter of this year.