Italy's economy grew 0.2% in the fourth quarter of 2016 from the third, and expanded a revised 1% year-on-year, data showed today. 

National statistics institute ISTAT confirmed a preliminary estimate for quarter-on-quarter growth, but revised down a previous 1.1% estimate for growth year-on-year.

Domestic demand contributed 0.4 percentage points to quarter-on-quarter growth, providing the biggest boost to output, but inventories shaved 0.2 percentage points off the growth rate. 

The country's third quarter growth was unrevised at 0.3% on the quarter and revised down to 1% from a previously reported 1.1% on the year. 

The figure is reassuring for the government of Prime Minister Paolo Gentiloni, who took over at the helm of the euro zone's most chronically sluggish economy last year and forecasts 1% economic growth in 2017.