"The economic recession is deepening, and, while a gradual recovery is expected in 2010, the possibility of a prolonged downturn cannot be ruled out," it said.

Bank of Italy's deputy director General Ignazio Visco said on Wednesday that Italy's GDP in 2009 may fall by as much as 2.6 percent, a figure much worse than that of 1975.

The Italian government has taken several measures to tackle the economic crisis.

The government's economic committee CIPE on Friday approved a program of public projects to help the country weather the global downturn.

Aimed at boosting the economy and creating jobs, the plan involves some 17.8 billion euros (US$23.1 billion), more than the originally expected 16.6 billion (US$21.6 billion), which would be mainly invested in infrastructures.

The government has also helped families pay their mortgages and buy durable goods.

Although the Italian banks so far do not seem to have been directly hit by the credit crunch, which began in September 2007 and then worsened in the second half of 2008, the government is debating whether to nationalize the country's banks in case of emergency.

In the meantime, facing the most difficult financial crisis in the new century that has affected nearly every part of the world, Italy still has a long way to find solutions to tackle its traditional problems.

(Xinhua News Agency March 11, 2009)