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

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

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

    Italy has been the eurozone’s most sluggish economy for more than 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 government is forecasting full year growth of 0.7 percent after contractions of 0.4 percent in 2014, 1.7 percent in 2013 and 2.8 percent in 2012.

    The lame recovery is seen driven by favorable external developments — the European Central Bank’s bond-buying program, which is keeping interest rates low; the weakness of the euro, which helps exports; and low oil prices.(SD-Agencies)