Italian gross domestic product (GDP) will only recover to pre-2007 levels by the middle of the next decade at the current rate of growth, the governor of the Bank of Italy said in his annual report briefing on Wednesday.

In a speech at the Italian central bank in Rome, with European Central Bank chief Mario Draghi sitting in the front row, Ignazio Visco said the economic crisis Italy has only recently left behind was the worst since the 1930s.

"While the Italian economy has been expanding for the past two years, albeit weakly," GDP remains well below that of the Eurozone, Visco said.

"(Eurozone) GPD growth should reach 2 percent this year, about double that of our country," the Italian central banker said.

"The economic development of our country is hampered by the rigidity of the context in which businesses operate, by weak productivity, and insufficient employment," Visco said. "Overall, wide margins of unutilized capacity remain (in our economy)," he said.

Visco added that the employment issue is "central" if Italy is to make a full economic recovery.

"An increase in labor market participation and an efficient and rational assimilation of immigrants into the labor market are necessary elements for the development of the country," he explained.

According to data released by the Italian National Institute of Statistics (ISTAT) on Wednesday, the country's unemployment rate stood at 11.1 percent in April, down 0.4 percent over the previous month. Youth unemployment stood at 34 percent.

The central bank governor added that Italy's public debt and the deteriorated loans held by its banks "reduce the margins for maneuver of the state (and) make the Italian economy vulnerable to market turbulence."

Italy must "continue removing the obstacles to business activity, encouraging competition, and stimulate innovation" if it is to come out of the slump, said Visco.

The government must also "resume spending on public investments, which have been dropping since 2010," Visco said.