Italy's economy did not expand at all last year while its spending deficit was 4.1 percent, Italian national statistics bureau ISTAT reported on Wednesday.

The zero growth rate for 2005 was significantly lower than previous forecasts by the Italian government, local and international institutions which had predicted the economy to expand by 0.2 percent.

Last September, the Organization for Economic Cooperation and Development (OECD)revised its GDP forecast for Italy, hiking it up from - 0.6 percent to + 0.2 percent.

The OECD confirmed this prediction in November but cut its growth forecast for 2006 from 1.5 percent to 1.1 percent.

At 4.1 percent, Italy's spending deficit for last year was lower than the government's prediction of 4.3 percent but higher than its 3.4 percent rate in 2004.

Italy has promised the European Union that it will bring the deficit back under the euro zone limit of 3 percent by the end of 2007.

In its report for 2005, ISTAT said tax pressure dipped from 40. 6 percent in 2004 to 40.5 percent last year, while 102,000 full- time jobs were lost.

Source: Xinhua