Italy’s economy grew slightly less than expected in the second quarter, data showed yesterday, as a weak recovery from three years of recession lost momentum.

Gross domestic product rose 0.2 per cent, slowing compared with a 0.3 per cent increase in the January-to-March period, and was up 0.5 per cent on an annual basis, national statistics bureau ISTAT reported.

The quarter-on-quarter growth lagged an average forecast of a 0.3 per cent rise in a Reuters survey of 31 analysts, while the 0.5 per cent year-on-year figure was in line with expectations.

Italy has been the eurozone’s most sluggish economy for more a decade and is widely forecast to continue to lag most of its peers this year, even though it should see a return to modest growth for the first time since 2011.

Growth in the second quarter was based on a rise in domestic demand, while negative trade flows held back the economy, ISTAT said.

Matteo Renzi’s 18-month old overnment is forecasting full year growth of 0.7 per cent after contractions of 0.4 per cent in 2014, 1.7 per cent in 2013 and 2.8 per cent in 2012.

The lame recovery is seen driven by favourable external developments – the European Central Bank’s bond-buying programme, which is keeping interest rates low; the weakness of the euro, which helps exports; and low oil prices which means cheap energy for firms and families.

But aside from these external factors Italy is held back by structural problems including stifling bureaucracy, widespread corruption and inefficient justice and education systems.

First quarter growth was unrevised at +0.3 per cent quarter-on-quarter, up 0.1 per cent year-on-year.

ISTAT gave no numerical breakdown of GDP components with its preliminary estimate for the second quarter, but it said growth had been seen in the service sector, while industry stagnated and agriculture contracted.

So called “acquired growth” after the second quarter stood at 0.4 per cent. This means that if GDP posts flat quarterly readings in the last two quarters of 2015, over the whole year it will be up 0.4 per cent from 2014.