Italy has slipped deeper into recession making it more difficult for Mario Monti’s technocrat government to control a debt crisis that is undermining the region.
The shrinking economy weakens tax revenues and hits jobs and consumer spending locking the eurozone’s third largest economy into a downward spiral.
Between April and June the economy contracted for the fourth straight quarter.
It was down by 0.7 percent from the previous three months.
Gross domestic product is 2.5 percent lower from the same period last year.
Some of the blame for the worse than expected decline comes from a powerful earthquake that crippled industry in the productive northern region of Emilia-Romagna, but analysts see no end in sight.
ISTAT, the government agency that compiles the figures, gave no numerical breakdown of GDP components with its preliminary estimate, saying only that activity contracted in agriculture, industry and services.
The employers’ lobby group Confindustria has forecast that the economy will contract by more than 2.4 percent this year – twice as much as the government’s official projection.
As the GDP figures were released there was some good news for Prime Minister Monti.
He won a procedural vote of confidence in the lower house of parliament limiting debate on a bill for an additional 4.5 billion euros worth of spending cuts this year. That should mean it becomes law sooner.