Italy's fiscal stimulus plans would leave the country vulnerable to higher interest rates that could ultimately plunge it into recession, the International Monetary Fund has warned.

The IMF recommend a "modest" fiscal consolidation instead to reduce financing costs.

Any temporary, near-term growth gains from the stimulus is likely to be outweighed by the "substantial risk" of a rapid deterioration, it added.

"Materialisation of even modest adverse shocks, such as slowing growth or rising spreads, would increase debt, raising the risk that Italy could be forced into a large fiscal consolidation when the economy is weakening," the IMF said.

"This could transform a slowdown into a recession."