Italy’s fiscal deficit came in at three per cent of gross domestic product last year, bang on the European Union’s ceiling for the second year running and in line with Rome’s most recent target, data showed yesterday.

The economy contracted by 1.9 per cent in 2013, slightly more than the government’s forecast of -1.8 per cent, following a GDP fall of 2.4 per cent in 2012, slightly revised from -2.5 per cent, national statistics bureau ISTAT reported.

Italy emerged from its longest post-war recession with marginal growth of 0.1 per cent in the fourth quarter of 2013. Weak growth is expected to continue this year.

Most analysts expect growth of around 0.5 per cent this year, about half the government’s official target of 1.1 per cent.

Italy’s public debt, the highest in the eurozone after Greece’s, rose to a new record of 132.6 per cent of GDP in 2013, ISTAT said, up from 127 per cent the year before.

That was slightly below the most recent government target of 132.9 per cent.

New Prime Minister Matteo Renzi has promised rapid and radical reform to tackle Italy’s weak economy and surging unemployment.