IMF forecasts 3.2% deficit for Italy for 2013
Says public debt to reach 133.1% of GDP next year27 September, 19:10
The forecast is above both the 3%-deficit threshold allowed by the EU and the 3.1% forecast Rome gave last week.
The Italian government last week revised its previous deficit forecast up from 3%, but said it would take action by the end of the year to get it back under the threshold and stop the European Commission opening an excessive-deficit procedure, just months after the country came out of one.
The IMF called on Premier Enrico Letta's government to find coverage to replace the revenue it will not get after rolling back the IMU property tax.
But the IMF also praised recession-hit Italy for having "sustained budget adjustments despite a difficult growth climate". The IMF said it expected Italy's deficit to drop to 2% next year.
Despite this, it forecast that the nation's huge public debt of over two trillion euros will climb to 132.3% of GDP this year and reach 133.1% in 2014.