Paris, Nov 20 (IANS/AKI) Italy's unemployment rate is expected to increase to 7.6 percent in 2009 and rise even higher in 2010, according to the latest economic outlook from the Organization for Economic Cooperation and Development.

In the report, the OECD said the jobless rate will rise to 8.

5 percent in Italy in 2010 and 8.7 percent in 2011.

However, the Paris-based organisation raised its forecasts for Italy's economic growth next year amid improving financial conditions, while calling for major efforts to rein in public finances from 2011.

In its twice-yearly Economic Outlook report, the OECD forecast gross domestic product would rise 1.1 percent in Italy next year, up from the 0.4 percent forecast it made in June.

'The severe recession in Italy started earlier than elsewhere but activity rebounded in the third quarter,' the OECD said.

'Improved financial conditions have helped rebuild confidence and bolster demand. Further support to exports will come from the recovery in world trade.'

Considered one of the slowest economies in the euro zone for more than a decade, the OECD said Italy was outperforming the average of the 16-nation bloc which is expected to post gross domestic growth of 0.9 percent.

Overall the OECD doubled its growth forecast for the leading developed economies next year and predicted a further acceleration in 2011 with China expected to drive the global recovery.

The economy of the OECD's 30 member countries will expand 1.9 percent next year and 2.5 percent in 2011, the Paris-based organization said in a report today.

'We now have numbers that support a recovery in motion,' Jorgen Elmeskov, the OECD's acting chief economist, said Thursday.

'It's still a slow recovery because of considerable headwinds from the need to adjust the balance sheets of households, enterprises and financial sectors.'

OECD groups the world's most industrialised countries.

--IANS/AKI

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