BERLIN, April 21: Italian productivity is finally picking up after years of stagnation, suggesting the country’s firms are restructuring and boding well for economic growth, Bank of Italy Governor Mario Draghi said on Saturday.

“For the first time strong employment growth is also accompanied by productivity growth,” Draghi told reporters after a meeting of EU finance ministers and central bankers in Berlin.

“In the past we have had employment growth but productivity has languished,” he added.

Italy has been one of the eurozone’s most sluggish economies for at least a decade, partly because its productivity has lagged far behind its eurozone partners as its unit labour costs have risen.

The central bank's quarterly bulletin said this month there were signs that Italian manufacturing was finally adjusting to fierce competition from Asia in its mainly low-tech strongholds such as textiles and white goods.

Last year's growth, at 1.9 per cent, was the strongest since 2000 but still well below the eurozone average.

Draghi said other positive signs were a rise in investments and the continued strong upswing in Germany, a major trading partner. More negatively, he noted consumer confidence remained weak and recent industrial output data was poorer than expected.

Economy Minister Tommaso Padoa-Schioppa, present at the same news conference, said it was too soon to say the country’s recovery was any more than a cyclical upswing.“I hope it will be the start of growth above the European average but we are still not there,” he said.

Turning to public finances, Draghi warned the government not to be hasty in spending some 2.5bn euros of extra resources which have become available this year.—Reuters