OECD warns Italy on reform path

The Organisation for Economic Cooperation and Development (OECD) has warned Italy that the country must implement spending cuts.

The organisation said the country’s new government that changes to reform policies could damage the country’s recovery.

“Italy has embarked on a wide-ranging strategy to restore fiscal sustainability and improve long-term growth. However, with the public debt-to-GDP ratio nearing 130% and a heavy debt redemption schedule, Italy remains exposed to sudden changes in financial market sentiment,” the OECD said in its annual report on the country.

The OECD welcomed progress made over reforms to boost economic growth over the past 12 months but warned that any change of course could damage Italy’s chances of recovery.

“Large and sustained reductions in public debt are therefore the top fiscal priority. The gains from recent structural reforms must also be consolidated and further measures to promote growth and improve competitiveness need to be implemented, to return Italy to healthy growth,” the report added.

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