Imf: we got it wrong on italy

The International Monetary Fund (IMF) has admitted it made a mistake over Italy's economy…

The IMF has once again halved its economic growth forecast for Italy and now predicts GDP will rise by 0.3% in 2008, over the previous year. The IMF also reduced its growth forecast for the whole euro zone with GDP this year expected to rise by 1.3% instead of 1.8% as indicated in a previous report.

Last October the IMF had lowered its GDP growth forecast for Italy from 1.7% to 1.3% but earlier this year halved this to 0.6%. Last month the Italian Treasury said that because of the global economic slowdown Italy's GDP growth in 2008 would be 0.6%, compared to its previous forecast of 1.5%.

The ISAE economic think-take in March cut its economic growth forecast from 1.4% to 0.5%. The IMF on Friday also said that Italy's budget deficit will be 2.5% of GDP this year and next, compared to 2.4% predicted by the Treasury and ISAE's figure of 2.3%.