Italian growth data confirms nation in recession:

Italy's economy contracted 0.7 percent in the fourth quarter from the third, definitive data showed on Monday, confirming the country is in a recession expected to  last for much of the year.

    National statistics office ISTAT said gross domestic product was down 0.4 percent year-on-year, slightly revising a preliminary estimate of -0.5 pct.

    Domestic demand slumped, investments and inventories declined while net exports contributed positively.

    Third quarter growth was confirmed at -0.2 percent q/q, but revised to +0.4 percent y/y from a previous estimate of +0.3 percent.

    The two consecutive quarters of decline in GDP constitute analysts' technical definition of a recession.

    The figures underscore the difficulties facing Mario Monti's technocrat government as it grapples with a shrinking economy dragged down by austerity measures and a debt crisis.

    Italian data lagged a euro zone average of -0.3 percent q/q and +0.7 percent y/y. Economic indicators are pointing to a further slowdown for most of 2012 in Italy, which has been the most sluggish economy in the euro zone over the last decade.

    The Bank of Italy forecasts a 1.5 percent full-year contraction this year, far steeper than the government's official projection of -0.4 percent.

    Over the whole of 2011, Italian GDP rose a work-day adjusted 0.5 percent, compared to a 1.8 percent rise in 2010.