The Italian new government is hoping the knock-on benefits of Italy's Sunday World Cup soccer victory will extend to its stalled economy.

Italian Economy Minister Tommaso Padoa-Schioppa told reporters: "I'm convinced the World Cup effect exists and that it is a positive one."

"This will boost Italy's international image, with a favourable impact on exports and confidence, which are at the heart of a revival in consumer spending and investments," he said.

A recent study by Dutch bank ABN Amro predicted that if Italy won the World Cup, its GDP would grow an extra 0.7 percent.

Asked to quantify the impact in terms of GDP, Padoa-Schioppa said that "it's impossible to indicate a figure or make precise calculations".

But the farmers' union Coldiretti echoed the minister's optimism, noting that official statistics showed Italy's last World Cup win in 1982 sent exports soaring 15 percent.

Italy is struggling to emerge from a period of economic stagnancy: over the past five years, GDP growth has averaged less than 0.7 percent per year.

At the same time, tough measures are required to bring down its burgeoning budget deficit and debt levels.

Italy's deficit has breached the European Union's 3 percent limit for the past three years and is on line for exceeding 4.6 percent of GDP this year unless action is taken.

The previous, Silvio Berlusconi-led government promised the European Commission that the deficit would be slashed to 2.8 percent by the end of 2007 and the European Commission has ruled out an extension on that deadline.

On the debt front, the Bank of Italy announced on Tuesday that it had hit a record level of 1,565.9 billion euros. It said that over the March-April period alone, Italy's debt mountain - the third biggest in the world - rose by 9 billion euros.

The debt began rising last year for the first time in a decade and has been forecast to hit 108.3 percent of GDP this year.

The government is working on a 35-billion-euro budget package for 2007, amounting to 2.5 percent of GDP, and has already passed an emergency 7-billion-euro supplementary budget for this year.

In other comments on Tuesday, Padoa-Schioppa said that the center-left government's economic planning blueprint (DPEF) approved last week "sees a return back below the 3 percent limit by the end of 2007".

The minister underscored that the European Union had shown " confidence" in the DPEF, which provides the basis for the future budget and contains guidelines and forecasts for the next four years.

The euro group, consisting of finance ministers from the 12 euro-zone countries, gave the document a green light on Monday.

Source: Xinhua