IMF praises Italy's economic progress Italy's financial revival has been strong and government forecasts can be met if reforms are fully implemented but more needs to be done to stimulate growth, according to the International Monetary Fund. Reza Moghadam, director of the IMF's European department, said after its annual assessment of the country's economy that Italy should have the highest primary surplus in the eurozone by next year. Mr Moghadam praised the progress made by Mario Monti's technocrat government in the last six months. "The policies put in place have created a certain degree of stability, they were ambitious and wideranging . . . [lifting Italy] from the brink," he said. Progress of the last months is a model to look at even at European level. "If Italian reforms bring product and labour indicators to the OECD median levels, then output could increase by about six percentage points over the medium term," he said, referring to the Organisation for Economic Co-operation and Development, a club for 34 of the world's most developed economies. The Fund also confirmed its projection of a 1.9 per cent contraction of the Italian economy, the third largest of the eurozone, in 2012. "[Although] the economy is expected to contract this year due to strong headwinds from fiscal consolidation and tight fiscal conditions, economic activity is expected to recover in early 2013," the IMF mission's concluding statement read. The statement warned that "risks to the outlook are tilted to the downside," both due to "renewed financial turmoil" and "slow progress in implementing reforms." Mr Moghadam pressed for further labour, tax and product markets reforms, including energy and public professional services as well as "identifying permanent large savings." "There is considerable scope to build on passed reforms for Italy to grow more," he said. Mr Monti said the IMF report showed how much Italy "has done and needed to do to put its public accounts on a safe basis and launch incisive reforms," Associated Press reported. Mr Monti was brought in last November to head a government of technocrats aimed at preventing Italy from succumbing to the eurozone's debt crisis.