Italy's GDP in 2005 is now expected to rise by 0.2 percent, according to the latest forecast from the Organization for Economic Cooperation and Development (OECD).

The OECD report had previously predicted GDP to shrink by 0.6 percent, Italian local media said on Tuesday.

The news was welcomed by Italy's economy minister, Domenico Siniscalco, who said the figures were "very encouraging, even more optimistic than the government's."

"In fact, indications are that the real economy is improving. However, this will be subject to the trend in fuel prices," he added.

In its mid-year outlook, the OECD warned that its latest forecasts could be revised downwards later this year because of soaring fuel prices and the effects of Hurricane Katrina.

The OECD also gave an improved GDP forecast for the euro zone, up 1.3 percent from 1.2 percent, with Germany the only member to see its GDP prediction lowered, from 1.2 percent to 1.0 percent. Britain's growth rate was also cut, from 2.4 percent to 1.9 percent.

Source: Xinhua