Italian economy sees signs of gradual recovery at the end of 2013

Friday 14 February 2014 16.47
Italy's economy contracted by almost 2% during 2013 - but did grow slightly at the end of the year
Italy's economy contracted by almost 2% during 2013 - but did grow slightly at the end of the year

Italy's economy began a gradual recovery in the fourth quarter of 2013 with 0.1% growth - the first positive result after its longest post-war recession, official data from the Istat agency has shown.

The slight rise in Italy's gross domestic product comes after eight quarters of contraction in a row and one of zero growth in the third quarter of the year.

The preliminary estimate, which was in line with analyst expectations, also showed that the economy contracted by 1.9% over the whole of 2013 following a shrinkage of 2.5% in 2012.

The government has said it is hoping for growth of around 1% this year and the Bank of Italy is predicting a 0.7% result but the International Monetary Fund is predicting only 0.6% growth.

Meanwhile, talks have begun in Italy on forming a new government following the resignation of Enrico Letta as prime minister.

Mr Letta stepped down after a vote was called by the Mayor of Florence, Matteo Renzi at a meeting of their centre-left Democratic Party.

The Italian President, Georgio Napolitano, is holding consultations today and tomorrow and is expected to offer Mr Renzi the opportunity to become prime minister.

Mr Letta came under pressure from his party over Italy's poor economic performance.