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ROME (Reuters) - The number of people living in poverty in Italy climbed to its highest level for more than a decade in 2016 despite a modest economic recovery, data showed on Thursday, in a report that could hurt the ruling Democratic Party (PD).

Those living in "absolute poverty" rose to 4.74 million last year, or 7.9 percent of the population, up from 7.6 percent in 2015 and the highest since current records began in 2005, national statistics bureau ISTAT reported.

ISTAT defines absolute poverty as the condition of those who are unable to buy goods and services "essential to avoid grave forms of social exclusion".

Italy emerged from a long recession in 2014, but the report shows that the slow growth posted since then has done little to help the poorest sectors of society.

Gross domestic product is forecast to rise by around 1.1 percent this year, up from 0.9 percent in 2016, but leaving Italy in its customary position among the euro zone's most sluggish economies.

The country faces elections next spring, and opposition parties were quick to blame the PD and its leader, Matteo Renzi, for the record poverty levels.

"When a government is unable to provide for people's basic needs, we can undoubtedly say it has failed," said Giovanni Barozzino, a senator for the Italian Left party, which split from the PD in 2015, complaining Renzi had dragged it to the right.

In the underdeveloped south of Italy, 9.8 percent of people were living in absolute poverty, compared with 7.3 in central regions including the capital Rome, and 6.7 percent in the wealthier north, including the business capital Milan.

ISTAT said Italians living in "relative poverty," or those whose disposable income is less than around half the national average, also edged up in 2016 to 8.5 million people, or 14.0 percent of the population.

That compared with 13.7 percent in 2015 and was the highest since current records began in 1997.

(Reporting By Gavin Jones, editing by Larry King)

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