ROME: The International Monetary Fund (IMF) on Monday increased its 2017 growth forecast for Italy to 1.3 percent from the previously more modest 0.8 percent.
But Italy's GDP growth will slow through 2018-2020 to reach 1 percent, the IMF said in its report following an annual mission to the country.
The Italian government itself has cautiously forecast growth of 1.1 percent in 2017 and 1 percent next year, reports AFP.
Italy's economic growth remains one of the weakest in the European Union, according to the IMF.
"Weak productivity and low aggregate investment remain key challenges for faster growth, held back by structural weaknesses, high public debt, and impaired bank balance sheets," it said.
The IMF called on Italy to accelerate the process of cleaning up the banking sector, weighed down by dodgy debt made up of loans which risk never being paid back.
These amount to some 350 billion euros gross, one of the highest levels ever in the eurozone.
Italy is currently being run by caretaker Prime Minister Paolo Gentiloni and the uncertainty over what comes next is seen as dampening an economy saddled with unemployment over 11.5 percent of the workforce.