Italy set for ‘weak recovery’

Rome: The Bank of Italy said the euro region’s third-biggest economy will experience a “weak recovery” this year from the worst recession in more than 60 years as a higher-than-reported jobless rate constrains consumer demand.

Italy’s gross domestic product will grow 0.7% in 2010 and 1% next year, the Rome-based central bank said in a quarterly report.

The Italian economy expanded in the three months through September, ending five quarters of contraction, helped by growth in Germany and France that fuelled demand for exports. The official unemployment rate reached a five-year high of 8.3% in November, and real joblessness is probably higher than 10%, the bank said in the report.