Italy's economy shrank by 1.9% in 2013 but its public deficit stayed within the European Union's limit of 3% of GDP in mixed news for the country's new government, official figures have shown.

The contraction - which followed a shrinkage of 2.5% in 2012 - was slightly more than the government's forecast of 1.8%, the National Statistics Institute (ISTAT) said.

The figures suggest that new Prime Minister Matteo Renzi, who took office last month, will have to work that bit harder to ease the ills in a country hit by widespread unemployment and social malaise.

The country's deep, 2-year recession - the longest in post-war Italy, ended in the fourth quarter with 0.1% growth and Renzi has promised swift reforms to boost the flagging economy.

Italy's public debt rose to a new record of 132.6% of GDP, up from 127% in 2012 and the second highest in the euro zone after Greece.

However, the public deficit in the euro zone's third largest economy stood at 3% of GDP for the second year running, disproving fears it would breach the EU threshold.