Italy's economy grows the fastest since 2010

Central Bank said if present growth continued, GDP would return to its 2007 levels, within 8 years

Italy's economy grew 0.4 per cent in January to March from the previous three months - twice as much as initially estimated and the fastest since the last quarter of 2010, data issued by central statistics agency Istat showed on Thursday.

Italian gross domestic product rose 1.2 per cent in the first quarter compared with the same period of 2016 and got a boost from inventories and solid consumer spending, Istat said.

While investment and net trade proved a drag, the Istat data raised hopes for the health of the Italian economy - the eurozone's third biggest - which is still lagging its European peers.

 

Italy's economy is still struggling to recover from is worst postwar recession, but the central bank said that if the present growth continued, GDP would return to its 2007 levels within eight years.

"At the current rate of growth, GDP would return to its 2007 level in the first half of the 2020s," said Bank of Italy Governor Ignazio Visco.

Aside from "cyclical factors", Italy's economic development is hampered by "rigidities" in the business environment, slow productivity growth and "unsatisfactory" employment rates, Visco said.

Italian Premier Paolo Gentiloni welcomed the Istat figures. "Italy is growing more than expected and the hard work is continuing," he tweeted.

The quarterly GDP data was "the fruit of years of serious and rigorous work," Italy's former Prime Minister and leader of the ruling centre-left Democratic Party, Matteo Renzi, wrote on Facebook.

"But I am not satisfied, because I know it is not enough," he added.

Renzi resigned as Premier in December after a crushing defeat in a referendum to reform Italy's constitution but was re-elected Democratic Party secretary in leadership primaries held in April.