Bank of Italy says growth to be worse than government forecasts

ROME (Reuters) - The Bank of Italy said growth is on track to be worse this year and next than the government forecast last month, a central bank official said on Tuesday in testimony to parliament on the 2014 budget proposal.

The central bank's July forecasts for gross domestic product to shrink 1.9 percent this year and expand 0.7 percent in 2014 have been confirmed by subsequent data, the central bank's director general, Luigi Signorini, said.

Italian Prime Minister Enrico Letta's government said in September GDP would decline 1.7 percent this year and rise 1.0 percent next year.

In earlier testimony, statistics office ISTAT said GDP would decline 1.8 percent this year. The euro zone's third-biggest economy will expand for the first time since mid-2011 in the fourth quarter of this year, ISTAT said.

(Reporting by Roberto Landucci; writing by Steve Scherer.)