Italy's public debt is high, and a credible adjustment is needed, the IMF says. "Our recommendation is that a credible budget adjustment would be important," says Victor Gaspar.
"Italy is an advanced economy with an elevated debt," he adds. "It is a country where by tradition there is concern about the bond market and the spread," he says. The IMF says it is working with the Italian government on a plan to reduce the debt. The country's debt is expected to reach $1.2 trillion by the end of the year, up from $2.1 trillion in 2013. It is the world's second-highest debt, after Greece, according to the International Monetary Fund. The U.S. has the highest debt, at $1 trillion, the IMF says, but is making progress on its goal of $1 billion a year in debt reduction by 2015. The United States has the lowest debt, with a debt-to-GDP ratio of just 0.7.