Italy’s economy will shrink by 1.4% this year, a much sharper contraction than previously forecast, according to the national statistic agency.
Istat forecast that Italy will post 0.7% growth in 2014, but added that unemployment will reach a record high of 12.3% next year.
Istat predicted in November that the eurozone’s third largest economy would shrink by just 0.5% this year.
The data underlines growing fears about the strength of eurozone economies.
Last week the European Central Bank cut interest rates to a new record low of 0.5%, and recent economic data has pointed to a slowdown in growth in Germany and France.
There have also been calls among politicians and policymakers to ease up on austerity measures, which many believe are now contributing to sluggish eurozone growth.