Italy's economy grew by 0.7% last year, below the government's official 1% forecast, but the budget deficit and public debt came in lower than expected, data showed on Monday.

The 0.7% increase in gross domestic product (GDP) reported by national statistics bureau ISTAT, boosted by four more working days than the year before, marked the same growth rate as in 2023.

This year, the Treasury is targeting growth in the euro zone's third largest economy at 1.2%, a figure considered unrealistic by virtually all independent bodies.

Most analysts forecast 2025 growth of around 0.7% for a third year running.

Gross domestic product stagnated in both the third and fourth quarters of last year, leaving an extremely weak carryover for growth in 2025.

Rome's budget deficit came in last year at 3.4% of GDP, a steep decline from 7.2% in 2023 when it was inflated by costly state incentives for home renovations, and well inside the government's 3.8% target.

(Reporting By Gavin Jones)