The Italian economy grew by just 0.1 per cent in the first quarter, the official data agency Istat said yesterday, confirming a sluggish recovery compared to other leading eurozone economies.

Istat’s second estimate for the growth rate lagged far behind Germany’s 1.5 per cent and France’s one per cent. Analysts polled by Dow Jones Newswires before the first estimate was published had expected a growth rate of 0.3 per cent.

Italy’s economy grew by one per cent on a 12 month comparison, Istat said.

“All the components of internal demand have risen,” Istat said, adding that imports grew 0.7 per cent and exports rose 1.4 percent in the first quarter.

Italy has normally relied on external demand to boost the economy but the contribution from exports has begun to diminish. A slowdown in the construction industry has also dragged down growth, while the farming sector has held up.

Data out last month showed Italy had the lowest growth rate in the European Union over the past decade, with an average yearly rise in gross domestic product of just 0.2 per cent between 2001 and 2010. The average for the European Union between 2001 and 2010 was 1.1 per cent.

The Italian economy last year grew by 1.3 per cent compared to an EU average of 1.8 per cent.

The EU economy as a whole grew by 0.8 per cent in the first quarter and by 2.5 per cent compared to the first quarter of last year.