Italy ups its growth forecasts

Italy raised its forecast for growth this year but trimmed its view for 2011, leaving its three-year deficit reduction programme on track. The Treasury now sees growth of 1.2 per cent of economic output this year, up from a previous estimate of one per cent, and of 1.3 per cent next year, down from 1.5 per cent previously. The government raised its debt forecast to 118.5 per cent of GDP this year and 119.2 per cent next year. Italy faces a period of sluggish growth after emerging from its worst post-war recession and the new forecasts underline the uncertainty facing country.