ROME (Reuters) - Italy's economy grew 0.3 percent in the first quarter from the fourth quarter of 2014 thanks to higher investments and inventories, data showed on Friday, and statistics office ISTAT forecast the recovery would continue.
The 0.3 percent increase in gross domestic product reported by ISTAT confirmed its preliminary estimate last month, while it revised upward the year-on-year change to a 0.1 percent rise from an originally reported flat reading.
The euro zone's third largest economy is gradually emerging from a three-year recession and ISTAT forecast that the second quarter would post quarterly growth of 0.2 percent.
First quarter growth was based on a pick-up in investments, which made a positive contribution of 0.3 percentage points, and a strong inventory build-up that added 0.5 points, ISTAT's breakdown of the data showed.
On the other hand, consumer spending declined and exports stagnated, with net trade subtracting 0.4 points from growth.
Italy has been one of the euro zone's most sluggish economies for well over a decade. Prime Minister Matteo Renzi's government forecasts 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.
Renzi is hoping for an ongoing recovery to maintain backing for reforms of the labour market and the education system, which have met fierce resistance from trade unions, the political opposition and parts of his own Democratic Party.
ISTAT said in its monthly bulletin that both domestic demand and exports should support growth in the second quarter, and added that its 0.2 percent quarterly growth forecast was a mid-point in a range from zero to +0.4 percent.