Italy's economy shrank by 2.4 percent last year and public debt rose to 127 percent of gross domestic product (GDP) from 120.8 percent in 2011, official data released on Friday showed.
The public deficit however lowered to 3.0 percent of GDP -- the European threshold -- from 3.8 percent in 2011, the Istat data agency said.
Italy also had a primary surplus -- without counting interests on debt -- of 2.5 percent of GDP, more than double the 1.2 percent in 2011.
Italy is enduring its longest recession in two decades and unemployment has hit record highs.
Household consumption fell 3.9 percent in terms of quantity, while fixed investment dropped 8.0 percent. Exports of goods and services rose by 2.3 percentage points and imports fell by 7.7 points.