ROME (Reuters) - Italy's economy showed encouraging developments in the first two months of this year, Economy Minister Giovanni Tria said on Wednesday.
He said the government's forecast for economic growth of 0.2 percent this year reflected expectations for a slight recovery in the first half, followed by a stronger pick-up.
Gross domestic product fell 0.1 percent in the third and fourth quarters of last year, putting the euro zone's third largest economy into a technical recession.
Speaking at a parliamentary hearing, Tria reiterated the 2020 budget would include a reform aimed at cutting income tax in compliance with the targets of the "DEF" economic and financial document which the government approved last week.
In the DEF, the Treasury raised this year's budget deficit target to 2.4 percent of GDP from a 2.04 percent goal fixed in December after a drawn-out tussle with the European Commission.
Interest rates on Italy's debt are still too high, Tria said, adding that the government hoped it could cut its forecast for interest spending.
For yields to continue falling, he said that "government plans, the incisiveness of the reforms and parliament's guidelines on budget policy will be important."
(Reporting by Giuseppe Fonte, writing by Maria Pia Quaglia, editing by John Stonestreet)
