* Italy budget deficit/GDP seen at 1.5 pct in 2013.
* Debt seen rising in 2012, 2013
* IMF forecasts may raise pressure on PM Monti for more cuts
ROME, April 17 Italy will miss its budget
deficit targets in 2012 and 2013 and its public debt will rise
in both years despite the government's austerity measures, the
International Monetary Fund forecast on Tuesday.
The IMF said in its Fiscal Monitor report that Italy's
deficit would fall this year to 2.4 percent of output, well
above Rome's 1.6 percent target, and would decline to 1.5
percent in 2013, when Italy is aiming to balance its budget.
The forecasts are a blow to Prime Minister Mario Monti,
whose popularity is sliding and whose reform efforts are meeting
rising criticism and resistance as the country's borrowing costs
Italy's huge public debt, the second highest in the euro
zone after Greece's as a proportion of GDP, will jump to 123.4
percent of gross domestic product this year, from 120.1 percent
in 2011, and edge up to 123.8 percent in 2013, the IMF said.
Earlier on Thursday the IMF forecast the Italian economy
would shrink by 1.9 percent this year and contract by 0.3
percent in 2013.
The Fund's forecast that Rome will significantly overshoot
its balanced budget target next year will put pressure on Monti
to adopt additional corrective measures, though the IMF itself
has urged against this due to the weak economy.
IMF Managing Director Christine Largarde praised Monti's
economic policies in an interview on Tuesday with Italian daily
Il Sole 24 Ore and said his 30 billion euro austerity plan
approved last year was "sufficient".
IMF Chief Economist Olivier Blanchard also told reporters on
Tuesday that Monti was pursuing the right policies.
Since taking office in November the former European
Commissioner has passed a reform of the pension system,
partially deregulated some professional services and proposed a
reform of the labour market which is still before parliament.
On Wednesday, the government will publish its own updated
economic forecasts, which are expected to sharply cut its
current projection, made in December, for a GDP fall of just 0.4
percent this year.
Despite the encouraging words of IMF officials, the figures
in the IMF report were all more pessimistic than the
It forecast that Italy's primary balance - the budget
balance excluding debt servicing costs - would post a surplus of
3.0 percent of GDP in 2012 and 4.0 percent in 2013. The
government currently has targets of 3.4 percent and 4.9 percent.
The so-called tax burden - fiscal revenues as a proportion
of GDP - will jump to 48.3 percent this year and rise to 49.0
percent in 2013 as a result of Monti's austerity plan, the IMF
said. The government forecasts it as stable at 43.8 percent in