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Italy's industrial production shrank by 0.8 percentage points in March from the level in February in a far worse result than expected, according to official data released on Friday.
Calculated over a 12-month period, industrial production shrank by 5.2 percent.
Industrial production had shrunk by 0.8 percent in February but had risen by 0.8 percent in January.
Intesa Sanpaolo bank economists had been expecting a monthly shrinkage of 0.3 percent and UniCredit bank had forecast a 0.4-percent contraction.
The only sector to see an increase was energy (+2.2 percent) but there were major falls in equipment (-8.0 percent), intermediary goods (-6.5 percent) and consumer goods (-4.5 percent).
Italy has been stuck in its longest recession in decades since 2011 and a recovery is only expected next year, although the turmoil that had hit Italy on the financial markets has abated.
The unemployment rate has soared to record highs and is currently at around 11.5 percent.
Italy formed a right-left coalition in April following two months of political stalemate produced by inconclusive elections.
The government has promised to do more to boost growth and create jobs, as well as reduce a high tax burden that has sparked anger among many.