The Italian government plans to implement an ambitious program in the next five years to sell 15-20 billion euros worth of state assets annually to reduce Italy’s massive state debt, Finance Minister Vittorio Grilli said on Monday.
“This measure, and also an annual economic growth of about 1 percent, will help reduce Italy’s state debt by 20 percent over five years,” Grilli said in an interview with Corriere della Sera.
Italy’s GDP is expected to contract by almost 2 percent this year compared with the previous forecast of 1.2 percent.
Italy’s state debt soared to 120.1 percent of GDP in 2011 and may hit 123.4 percent of GDP this year.
Moody’s Investors Service downgraded Italy’s government bond rating to Baa2 from A3 with a negative outlook on Friday , saying it expected the eurozone’s third largest economy to experience greater economic difficulties in the near future.
“Italy is more likely to experience a further sharp increase in its funding costs or the loss of market access than at the time of our rating action five months ago due to increasingly fragile market confidence, contagion risk emanating from Greece and Spain and signs of an eroding non-domestic investor base,” the international rating agency said.