ROME: Italy's economy shrank slightly in the third quarter due to weak domestic demand, data showed on Friday, putting the country back in recession and marking the 13th quarter running without any growth.
Gross domestic product fell 0.1 percent following an unrevised 0.2 percent decline in the previous three months, statistics bureau ISTAT reported, matching the median forecast in a Reuters survey of analysts.
On an annual basis the decline of 0.4 percent followed a second quarter drop of 0.3 percent.
The data is another blow for the government of Prime Minister Matteo Renzi, who took office in February vowing to create jobs and revive the economy, which has been sluggish for more than a decade.
Still, after a spate of recent weak data the GDP figures were greeted with relief by some analysts.
"I actually expected something a bit worse, but Italy continues to be the worst-performing large euro zone economy and this data confirms there is a very specific Italian problem," said Riccardo Barbieri, chief European economist at Mizuho.
Italy, the euro zone's third-biggest economy, again lagged its main partners in the third quarter. Germany grew by 0.1 percent from the previous three months, while France beat expectations to expand by 0.3 percent. Spain grew 0.5 percent.
Renzi's coalition government in September forecast the economy would contract by 0.3 percent this year, following GDP falls of 1.9 percent in 2013 and 2.3 percent in 2012.
Its forecast for growth of 0.6 percent next year is already looking optimistic. The Organisation for Economic Co-operation and Development this month projected just 0.2 percent growth for Italy next year.
ISTAT gave no numerical breakdown with its preliminary GDP estimate, but said exports had provided some support, while domestic demand had declined.
Mizuho's Barbieri said there was no sign that tax cuts for low earners and companies, introduced by Renzi in April, had provided any boost and far more significant reforms were needed.
"I would say this data is an indictment of the government's policies," he said, adding that he forecasts another marginal decline in the fourth quarter.- Reuters
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