Renzi sees ‘signs of recovery’ despite setback

"I remain optimistic," Renzi said on Radio 24.

"We are not saying that the crisis is over but that there are important signs of recovery," he said.

Renzi said the 0.1-percent output dip announced on Thursday, which sent stocks tumbling in Milan, showed that "we have to accelerate the measures needed for a recovery".

The centre-left prime minister said new jobs were being created, the number of mortgages was rising and industrial production was rising again.

Renzi came to power in February, ousting the previous incumbent Enrico Letta in an internal power struggle within the ruling Democratic Party.

The former mayor of Florence has since approved a series of measures to boost growth, including cutting taxes on the middle class and reducing a company tax.

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