Italy industrial output declines more than expected in January

Data from statistical office Istat showed Monday that Italy's industrial output fell more than expected in January. Italian industrial output fell 2.3 percent month-on-month in January raising doubts over the health of the euro zone's third largest economy.

The drop in January came after an unexpectedly strong 1.4 percent rise in December and was larger than the decline of 0.8 percent forecast in a Reuters' poll.

On a yearly basis, industrial production dropped unexpectedly by 0.5 percent, which was the first drop since July 2016. The drop followed a 6.8 percent rise in December and wide missed economists' forecast for a rise of 2.6 percent.

Italian industrial output has a close correlation with gross domestic product (GDP), which rose 0.9 percent in 2016 and is predicted to grow by a similar amount this year, according to a Bank of Italy forecast.