The International Monetary Fund (IMF) said in its biannual World Economic Outlook released Tuesday in Tokyo that it now expects Italy's economy to contract by 2.3% this year and 0.7% in 2013, adjusting its July forecast that it would shrink of 1.9% and 0.3%.
Seven out of the eurozone's 17 members are predicted to experience economic contraction this year and the "risks for a serious global slowdown are alarmingly high," the IMF said. The IMF also said that the numbers for 2013 are not much better and the global economy risks another recession just three years after recovering from the previous one in 2009.
Last month the Italian government was forced to sharply slash its economic forecasts to predict a 2.4% contraction in 2012, double the 1.2% drop it had previously forecast.
That was after Italy shrank for the fifth straight quarter in the second quarter, with gross domestic product sinking 0.8% in the second quarter and 2.6% in the year.