• Output dropped 0.6% in May, missing analysts’ median estimate
  • IMF sees the Italian economy expanding 1.1% this year

Italian industrial production fell in May, creating further difficulties for Prime Minister Matteo Renzi’s plans to put the economy on a stable footing.

Output decreased 0.6 percent from April, when it rose a revised 0.4 percent, national statistics office Istat said in Rome Monday. The median estimate of 16 analysts surveyed by Bloomberg News called for growth of 0.1 percent in May. On an annual, work day-adjusted basis industrial production also fell 0.6 percent.

The International Monetary Fund estimates that the Italian economy will expand 1.1 percent this year, trailing most other euro-area nations. A looming Italian bank crisis and the U.K.’s June 23 vote to leave the European Union will further test Renzi’s ability to spur growth.

“The repercussions from the U.K. referendum affect the euro area in a difficult moment,” Bank of Italy Governor Ignazio Visco said Friday in a speech in Rome. “The economic recovery is under way, but it is fragile; unemployment remains high; inflation remains very low.”

The Italian economy, the third-biggest in the 19-nation euro region, returned to growth last year, emerging from its longest recession since World War II.

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