ROME: Italy's economy grew by more than previously estimated in the first quarter, official data showed Tuesday, amid growing optimism about the country's recovery.

Gross domestic product (GDP) was up by 0.1 percent compared with the previous quarter, national statistics office Istat said in a statement.

The Rome-based agency corrected its previous estimate, issued in late April, of a quarter-on-quarter contraction of 0.4 per cent.

Year-on-year, however, GDP was still down by 0.8 percent.

Agriculture and industry contributed to the economic recovery in the first quarter, with quarterly growth of 3.9 percent and 1.8 percent, respectively.

Istat also said that employment in April rose by 0.1 percent from March, with 22.34 million people reported to be in work.

However, the labour market is still depressed compared to pre-pandemic levels -- in February 2020, employment figures were higher by 800,000.

Italy is emerging from its worst recession since World War II. Last year, GDP plunged by 8.9 per cent, one of the most severe slumps in Europe.

However, things have recently started to look up, with falling Covid death tolls, progress with vaccinations and gradual reopenings of the economy.

Tuesday marked the first day in months in which cafes and restaurants were allowed to serve customers indoors and sport stadiums reopened to the public.

"Italy is strong, alive and is yearning to restart. The pandemic months have been very tough, for workers and businesses," Prime Minister Mario Draghi said during a visit in the northern Emilia Romagna region.

"But thanks to sacrifices made by Italians and the strong acceleration of the vaccination campaign, we are facing a new phase," he added.

Italy is pinning much of its longer-term recovery hopes on a 222.1-billion-euro ($271-billion) investment plan mostly funded by European Union loans and grants, covering the 2021-2026 period.