This is not the time to hike spending

Simona Granati | Corbis News | Getty Images

ROME, ITALY – JULY 24: Minister of Economy Giovanni Tria attends a press conference.

The International Monetary Fund (IMF) has one clear message for the Italian government: this is not the time to increase your spending bill.

In an interview with CNBC Friday, Poul Thomsen, the IMF’s Europe Department chief, said at this stage of the economic cycle, Italy “should take more advantage of the situation to bring down debt.”

The Italian government’s decision to increase public spending in 2019 has raised concerns in Brussels and in financial markets. Italian stocks and government debt have been hit by these concerns, with investors worried that the extra spending will become a problem in the future due to Rome’s massive debt pile.

“Italy needs to consolidate at this point of the cycle and not to relax, as the (budget) plans would entail,” Thomsen told CNBC’s Geoff Cutmore.