The Greek crisis could have a major impact on Italy, although the risk of full-blown contagion is limited, the International Monetary Fund said Tuesday.
"Adverse developments in Greece could have a substantial impact on Italy via the effects on confidence, although direct exposure is limited," read the IMF's Article IV on Italy. "The risks of contagion in the short term are limited too".
Premier Matteo Renzi's government has repeatedly said Italy is not in peril even in the case of a Greek default and exit from the eurozone, as Rome has adopted reforms and has the shelter of the ECB's bond-buying programme.
The Italian economy is gradually emerging from years of recession, but the recovery is fragile, the International Monetary Fund. The IMF forecast that the Italian economy will growth 0.7% this year and 1.2% in 2016.
The IMF praised Premier Matteo Renzi for launching "an ambitious agenda to revise the Italian economic and political system". It added: "now there is a window of opportunity to take with deeper reforms to boost growth". It specifically encouraged measures to improve public-sector efficiency.
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