Italy's economy will grow by 1% this year, national statistics bureau ISTAT said on Thursday, raising a previous forecast of 0.7% made in December.

In its twice-yearly economic outlook report, ISTAT also predicted that gross domestic product in the euro zone's third-largest economy will increase by 1.1% in 2025.

It said growth this year will be supported by both domestic demand and trade flows, whereas in 2025 will be driven predominantly by domestic demand.

ISTAT's forecasts equal those of Italy's Treasury, which estimated in April that the economy would expand 1% this year and 1.2% in 2025, down from the previous goals of 1.2% and 1.4% respectively.

This year, most analysts expect annual growth between 0.7% and 1%. In the first quarter, GDP grew by a modest 0.3% from the previous three months, following growth of just 0.1% in the fourth quarter of 2023.

ISTAT estimated an average jobless rate of 7.1% this year, down from 7.5% seen in December, and forecast a fall to 7% next year.

(Reporting by Antonella Cinelli, editing by Gavin Jones and Alvise Armellini)