Italy's Public Debt Hits Record 1.94 Trillion Euros

Italy's public debt reached a record 1.94 trillion euros ($2.47 trillion) in January, the Bank of Italy said Thursday, pushed upwards in part by higher borrowing costs.

The public debt increased by 37.9 billion euros from December, the central bank said, citing seasonal factors, the higher cost of servicing Italian debt and a contribution to the European financial rescue fund.

The Italian public deficit meanwhile hit 4.0 billion euros in January, up from 1.5 billion euros a year earlier, the bank said.

Italy's staggering debt load is equivalent to about 120 percent of its annual gross domestic product (GDP) and the country is due to issue almost 450 billion euros worth of short- and medium-term debt this year.

Investors in recent weeks have shown a growing confidence in Italy, which three months ago was seen as a possible future victim of the Eurozone debt crisis.

Market pressure on the country began to ease in January, with rates for reference 10-year bonds falling below 5.0 percent from 7.0 percent late last year.