Italy’s unemployment rate dropped below the symbolic 10% threshold in May to 9.9%, provisional data from the national statistics agency showed Monday.

It was the first time the jobless rate has dipped into the single digits since February 2012, when it stood at 9.9%.

The data will be welcome news for Italy’s populist coalition government, which has been criticised by Brussels for its big spending, but insists that loosening the purse strings will boost the economy and create jobs.

While the May figure was down 0.2 points from April, it was still well above the euro area average, which was 7.5% in May, Italy’s statistics agency ISTAT said.

There was good news on the general employment front as well: the rate increased by 0.1% point to 59%.

Over a year, the upward trend in the number of people in work continued, with an increase of 0.4% compared to May 2018, or some 92 000 more people in jobs, ISTAT said.

Despite the upswing, the forecasts for 2019 are not good. ISTAT expects an overall unemployment rate of 10.8% in 2019 in Italy, up on 10.6% in 2018.

The OECD is more pessimistic, forecasting a jobless rate of 11.7% in 2019, and 12.3% the next.

Italy’s gross domestic product (GDP) grew only 0.1% in the 1st quarter, after a recession in the last half of 2018, as the nation’s economy is being buffeted by an economic slowdown in Europe, trade tensions between China and the United States, as well as unease among Italian businesses over the policies of the far-right and anti-establishment coalition that is leading the country.

The government is currently engaged in delicate negotiations with the European Commission, which has threatened to open disciplinary proceedings against Italy over its mammoth debt.