MEXICO CITY -(Dow Jones)- Italy has achieved "notable results" on the budget side, but has now to insist on growth, Bank of Italy governor Ignazio Visco said Saturday.

Talking to reporters as he attends the meeting of finance ministers and central bankers from the Group of 20 industrial and developing nations in Mexico City, Visco said Italy's response to the European debt crisis is still under scrutiny, but the country has done notable steps to improve its finances.

"Now we need to insist on growth, also at a European level," Visco said.

The new Italian government headed by Mario Monti has pushed through pension cuts, higher retirement ages and liberalization measures, and has pledged to dismantle employment protection laws, in a bid to balance Italy's budget by 2013 and convince investors the country can sustainably finance its EUR1.9 trillion in sovereign debt.

But the Italian economy contracted sharply in the fourth quarter, shrinking 0.7% from the previous three months, signaling that the euro zone's third-largest economy is in technical recession.

Visco said Saturday the rising tensions on the oil market may also be on the G-20 agenda, and need "us to be vigilant."

The Italian central banker also said the results of the next round of the European Central Bank's long-term refinancing operation, set for Feb. 29, will be closely watched to evaluate future decisions. But he added that, for now, the main opinion is that "a third round won't be necessary."

-By Giada Zampano, Dow Jones Newswires; +39 348 7678016; giada.zampano@dowjones.com