the italian economy shrank in the first three months of the year its first onquarter contraction since the fourth quarter of 2020 as the spread of the covid19 omicron variant weighed on services activity and a jump in energy prices hit manufacturers italys economy the eurozones thirdlargest contracted by 02 in the first quarter compared with the previous threemonth period the italian statistics agency istat said friday the contraction in italys economy is in line with what economists anticipated in a poll by the wall street journal in 2021s fourth quarter the italian gross domestic product expanded by 07 the decline in firstquarter gross domestic product was driven by a decrease in the services sector output while the industrial sector stagnated and marks the weakest quarter since late 2020 when the countrys economy struggled amid covid19 pandemicrelated restrictions on an annual basis italys economy grew 58 in the first quarter the italian economy is expected to rebound in the second quarter due to the continued normalization of activity after the covid19 pandemic but uncertainty stemming from the war in ukraine and high energy prices pose risks to the outlook prime minister mario draghis government in april lowered its economic forecasts for this year expecting a 31 expansion from the 47 growth anticipated in september