Italy downgrades 2012, 2013 growth forecasts

The Italian government on Thursday revised down its growth forecasts, predicting a contraction of 2.4% in 2012 and 0.2% in 2013 but said it would still manage to balance its budget next year.

The Italian government on Thursday revised down its growth forecasts, predicting a contraction of 2.4% in 2012 and 0.2% in 2013 but said it would still manage to balance its budget next year.

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The government, which had previously forecast a shrinkage of 1.2% in 2012 and an expansion of 0.5% in 2013, said the new figures were due to "a deterioration in the international environment, in particular the euro area crisis.