IMF warns Italy's spending plan makes country vulnerable

IMF warns Italy's spending plan makes country vulnerable
Italian Prime Minister Giuseppe Conte arrives for a Libya conference in Palermo, Italy, Monday, Nov. 12, 2018. Representatives of Libya's quarrelling factions and of countries keen on stabilizing the North African nation started meetings in Sicily Monday, as Italy encourages a political settlement that could bolster the fight against Islamic militants and stop illegal migrants from crossing the Mediterranean to Europe's southern shores. (AP Photo/Antonio Calanni)

MILAN (AP) — The International Monetary Fund is warning that Italy’s plan to sharply increase spending carries “substantial” risks and would leave the country vulnerable to market turmoil.

In a regular review of the Italian economy, the IMF says Tuesday that “Italy needs to put to rest any concern about public debt sustainability, which recently has resurfaced.”

Italy’s populist government has proposed a budget that would see its deficit bloat to 2.4 percent of gross domestic product, more than three times its previous target. That would keep it from reducing its debt load.

The European Union has asked Italy to revise the budget by the end of Tuesday and the standoff has unsettled investors. They have sold off Italian debt, pushing up borrowing rates.

The IMF recommends Italy tighten its public finances instead.