The agency said there were 12,000 fewer births in 2013 than in 1995, when the previous low record was set.
Italy still has one of the oldest populations in the world, with 151.4 people over the aged of 65 for every 100 young people under 15. Italy has the second-oldest population in Europe, behind Germany with 158 seniors for every 100 young people. Life expectancy is 79.6 years for men and 84.4 for women.
The report also said that the economic crisis has eased the inflow of immigrants: 321,000 people arrived in 2012, 27.7 percent less than in 2007. Meanwhile, 38,000 foreigners left Italy in 2012, 17.9 percent more than the previous year.
When it comes to standard of living, Istat said Italy has the worst record in the EU for income inequality, with an estimated 7.6 million people considered as being “severely deprived”. However, this is a drop of 2.5 percent compared to 2012.
Italy's economy unexpectedly moved back into negative territory in the first quarter due to poor industrial results after barely exiting its worst post-war recession,
Growth will remain slow for the rest of the year, with Istat forecasting GDP at 0.6 percent in real terms for 2014, with a one percent growth rate forecast in 2015 and 1.4 percent in 2016.
Last week, Istat said estimated revenues from drug trafficking and the sex trade will be used to calculate GDP, starting next year in a move expected to boost its economic results.