Italy raises 5.5 bn euros at lower rates

Italy placed 5.5 billion euros ($7.37 bn) in medium- and long-term debt at significantly lower rates on Wednesday, reflecting improved confidence in the economic outlook for the recession-hit country.

The Italian Treasury raised 3.0 billion euros due to expire in 2016 at a rate of return for investors of 1.79 percent compared to 2.25 percent in the previous auction in October.

Demand was 1.8 times the amount of bonds offered.

The Treasury also sold 1.46 billion euros' worth of bonds due to mature in 2044 at a rate of 4.99 percent, down from 5.19 percent in July.

It also sold 1.0 billion euros of 5-year floating-rate bonds (CCTeu) at a rate of 2.11 percent compared to 2.32 percent last month.

Italy, the third-biggest economy in the eurozone, has been mired in a recession for two years and unemployment has been rising for months, but the government has said it is expecting a gradual recovery to start towards the end of this year.

The official statistics agency Istat has predicted the country's gross domestic product (GDP) will shrink by 1.8 percent in 2013, but has forecast that the economy will then switch into growth, expanding by 0.7 percent in 2014.

On Tuesday, the agency said Italian inflation had slowed in October, but less than analysts had expected.