Italy's economy edges out of recession in Q1 2019: ISTAT

ROME: Italy's economy grew slightly more than expected in the first quarter of the year, lifting the country out of its third recession in a decade, data showed on Tuesday.

Gross domestic product (GDP) rose a quarterly 0.2 percent between January and March, and was up 0.1 percent on an annual basis, national statistics bureau ISTAT reported.

Italian GDP had fallen 0.1 percent in both the third and fourth quarters of last year, putting the euro zone's third largest economy into what economists define as a "technical recession" of two straight quarters of shrinking output.

The swift return to growth, however tepid, will be a big relief to the coalition government, which is struggling to keep a lid on both the budget deficit and state debt as it looks to fulfil a campaign pledge to boost welfare spending.

The first quarter data beat an average forecast of a 0.1 percent rise quarter-on-quarter and a 0.1 percent decline year-on-year, in a Reuters survey of analysts.

Earlier on Tuesday, the European Union's statistics office Eurostat said economic growth in the 19-nation bloc was stronger than expected at the start of this year, rising 0.4 percent quarter-on-quarter in the first three months of 2019, up from 0.2 percent in the fourth quarter of 2018.

ISTAT gave no numerical breakdown of components with its preliminary, first quarter estimate, but said industry, services and agriculture had all shown an increase in activity.

Data released last month showed that the fall in Italy's fourth quarter GDP was primarily due to a sharp reduction in inventories, while exports, consumer spending and investments had all expanded at the end of last year.

The Bank of Italy recently flagged that it thought the economy had emerged from the downturn in the first quarter, thanks in part to an unexpected increase in industrial production at the start of 2019.

The closely-watched IHS Markit purchasing managers index (PMI) added to the optimism by showing that services had expanded in February and March, with last month's growth the strongest since September.

Earlier this month, the government of the anti-establishment 5-Star Movement and the right-wing League slashed its forecast for full-year growth to 0.2 percent from 1.0 percent.

Italy has been the euro zone's most sluggish economy since the launch of the single currency 20 years ago, and this year it is again seen expanding less than all its peers.