The International Monetary Fund called on Italy Monday to press on with reforms to head off the threat of a banking crisis and ensure the nation's economic growth continues to gain momentum, according to dpa. The eurozone's third biggest economy should expand this year by 1.1 per cent before accelerating to a 1.3-per-cent growth rate in 2017 as unemployment falls and public debt levels edge lower, the Washington-based IMF said in its annual report on Italy released on Monday. The Italian economy grew by 0.8 per cent in 2015 after it emerged from its longest recession since the end of the Second World War. "Italy is recovering from a protracted recession supported by accommodative monetary and fiscal policy, favourable commodity prices, and improved confidence on the back of the authorities' wide-ranging reform efforts," the IMF wrote. But the IMF warned: "Risks are tilted to the downside, including from financial market volatility, the refugee surge, and headwinds from the slowdown in global trade." Italy is a major destination for refugees trying to enter Europe from the Mediterranean Sea. Financial sector reforms "are critical to entrench financial stability and support the recovery," the IMF wrote in its report. The IMF said it backed further measures including stepped-up debt restructuring, strengthened bank supervision and a more extensive assessment of the quality of assets held by the banks. The IMF also called for additional pro-growth reforms aimed at broadening the nation's tax base and ensuring more efficient public spending.
