Despite a decline in its gross domestic product (GDP) and output in the second quarter of the year, Italy has seen some positive signs of an economic recovery some time next year.
Italy's GDP contracted 5.9 percent on an annual base, according to data released this week by the Organization for Economic Cooperation and Development (OECD).
The Paris-based institute showed a 0.58 percent fall in output in the second quarter of this year, compared to the previous quarter.
Italy was the second worst performing economy after Britain, which recorded a fall of 0.8 percent in GDP over the previous quarter.
Nevertheless, data have also indicated that Italy is showing positive signs of economic recovery, though exit from the crisis is still distant and output levels are falling.
OECD said in its June preliminary report that there were stronger indications that the world's industrialized countries including Italy were emerging from recession and were on the path to recovery. Italy's leading indicator was 4.8 points higher, compared with a year earlier, OECD said.
Italian Industry Minister Claudio Scajola Friday sounded optimistic about the country's economy, saying that "there are the first timid signs of recovery that will bring Italy out of the crisis better than it entered."
Scajola said the current government has taken various measures to combat the crisis, such as helping companies to invest in their businesses with lowering taxes on profits, helping businesses with research and innovation, and safeguarding employment.
Before the summer break the Italian parliament approved the annual budget and passed an important anti-crisis bill aimed at overturning the negative economic outlook and sustaining Italian families.
Among the measures taken are tax shields for capital return, new pension schemes, financial incentives for small and medium businesses and a collective indemnity for domestic workers.
"The Berlusconi government has taken numerous steps in the past months," Scajola said.
Italian Prime Minister Silvio Berlusconi told a press conference earlier this month that "Italy leads other European countries in the economic recovery."
"I insist that confidence is essential to rapidly overcome the economic turmoil," Berlusconi said.
However, OECD also warned in its June survey that "economy is in a sharp recession, mainly because of external developments linked to the global financial crisis, and there is great uncertainty about the strength and timing of the recovery."
Alberto Mingardi, director of Turin-based Bruno Leoni Institute, said Italy has not been severely hit by the economic turmoil because its banks are less exposed than other countries and Italy has suffered from a long-term slow economic growth.
"Paradoxically, once Italy exits the crisis it will perform better than many other countries," Mingardi said, adding that "Italy has not been heavily damaged by the global financial turmoil because when the crisis broke out it was already negatively performing."
Mingardi predicted that the Italian economic output will further contract this year and the first signs of recovery will be visible only in 2010.
"Government has done little to boost the economy, there are limits to national budget increase because of high deficit and debt levels," he said.