The damage caused by the economic crisis was comparable with that caused by a war, Italy's leading industrial association Confindustria said here on Thursday.
"The increase and level of public debt are similar to those occurred at the end of global conflicts ... A sort of war is being fought once more in Europe and in Italy," said a report by the Confindustria's research center.
To be especially hit by the crisis were "the most precious and vital parts" of the Italian economic system, or manufacturing industry and the younger generations, "on which the country's future depends," the report wrote.
During a briefing in Rome, the head of the research center, Luca Paolazzi, said "Italy is in the abyss", predicting a gross domestic product (GDP) drop of 2.4 percent in 2012 and 0.3 percent in 2013. A recovery will only start from the second half of next year.
Last December, Confindustria had estimated the GDP would decline by 1.6 percent in 2012, and rise by 0.6 percent in 2013.
Italy's recession has intensified and household consumption will suffer a 2.8-percent drop this year especially due to extreme uncertainty and prohibitive access to bank credit, the report wrote.
Average unemployment was predicted to rise to 11.8 percent in 2013, and fiscal burden to reach the record high level of 54.6 percent.
Also on Thursday, Italy's national statistics agency Istat said inflation rose to 3.3 percent in June over a one-year period, after easing to 3.2 percent in May, while prices rose 0.2 percent from the previous month.
In an effort to lower its public debt accounting for around 120 percent of GDP and stimulate stagnant economy, Italy's emergency cabinet of technocrats led by Prime Minister Mario Monti has raised taxes, and carried out pension and labor reforms.
On Wednesday, a controversial labor reform that Monti considered a fundamental step ahead of the crucial European Union (EU) summit kicking off in Brussels on Thursday, won the parliament's final approval.
But according to many analysts, the government was only further depressing the country through taking money from consumers' pockets, instead of seriously acting to reduce massive public spending and waste.