ROME (AFX) - Maxwell Watson, head of the IMF's annual fact gathering mission in Italy, said that Italy's public deficit will not exceed 1.5 pct of GDP if the government thoroughly controls spending and enacts announced corrective measures. Speaking at a joint press conference with the Economy Minister Giulio Tremonti, Watson said a "strong and incisive" policy is needed to reach the goal. Watson said it is possible that Italy will reach a balanced public budget in 2003 as planned by the government. Watson forecast that the increase in consumer prices could fall to below 2 pct on a year-on-year basis at the end of the year or early 2002. To reduce taxation the government has to review welfare and regional spending, he added. Tremonti said that currently the public deficit is running at an annualised 1.8-1.9 pct and it is possible to limit the annual deficit at 1.5 pct or less.