Italian inflation remains stubbornly high, while public debt is falling for the first time since February, dpa cited official data as showing on Thursday. Istat, the national statistics office, said that prices rose by 3.2 per cent on an annual basis in August, 0.1 percentage points more than in July. The increase was mainly because of rising fuel prices, with prices increasing year-on-year by 15.1 per cent for petrol and by 17.5 per cent for diesel. Public debt fell to 1.96 trillion euros (2.54 trillion dollars) in July, down from a record 1.97 trillion euros recorded the previous month, according to figures from the Bank of Italy. Italy is the most indebted nation in Europe compared to the size of its economy, the eurozone's third-largest. Its debt to gross domestic product product (GDP) ratio stands at around 120 per cent, twice the limit prescribed by European Union rules. Despite tough austerity measures adopted by Prime Minister Mario Monti's technocratic government, budget balancing efforts are being hampered by a deep recession. On Thursday, Confindustria, the country's main business lobby, predicted that GDP would contract by 2.4 per cent in 2012 and by 0.6 per cent in 2013.
