BRUSSELS (Reuters) - The European Commission will continue to closely monitor developments in the Italian economy after it slashed its growth forecasts for the country this year and next, the EU's economic commissioner said on Thursday.

Pierre Moscovici said signs of a rebound for the Italian economy driven by higher public spending were not visible and that without the cut of Italy's targeted deficit agreed with Brussels in December, the conditions of the Italian economy would be much worse than forecast.

The Commission in its quarterly forecasts said earlier on Thursday that Italy will post the slowest growth rate in the EU this year and next, with growth expected to be at 0.2 percent this year, much lower than previously estimated.

(Reporting By Jan Strupczewski and Francesco Guarascio)

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