Rome - In a smaller than expected drop, Italy's gross domestic product (GDP) fell by 0.5 per cent in the second quarter, according to figures released Friday by the country's national statistics office.

The shrinkage marks the fifth consecutive decline in GDP for Italy - the euro zone's third largest economy - but far less steep than the record 2.6 per cent first quarter drop.

The slower decline in Italy's economy suggests the 16-nation euro zone's deep recession is easing, something which could be further emphasised when other large euro zone nations, Germany and France, issue data on their economies next week.

The Rome-based ISTAT national statistics office reported GDP was down 6.0 per cent compared to the same period the previous year - the same sized decline as between January and March 2009, which had posted the steepest fall since the current series of statistical reporting began in 1980.

ISTAT gave no numerical breakdown of GDP components with its preliminary estimate, but said industry, services and agriculture had all posted quarterly contractions.

Prime Minister Silvio Berlusconi's conservative government last month cut its 2009 GDP forecast to -5.2 per cent, after last year's 1.0 per cent contraction. (dpa)