Unemployment rate in Italy has fallen to its lowest level since the end of 2012, national statistics institute ISTAT said on Friday.

The unemployment rate dropped to 11.4 percent in March, 0.3 percent down on February and 1.1 percent down on March 2015, the statistics institute said.

Youth unemployment also fell to its lowest level since the end of 2012, with the rate for those aged between 15 and 24 dropping to 36.7 percent in March, down 1.5 percent on February and 5.4 percent on March 2015.

ISTAT also added that the number of employed people in Italy rose 90,000 in March compared to February and 263,000 compared to March 2015.

The government of Prime Minister Matteo Renzi has passed a much awaited labor reform named Jobs Act that various experts say was the most important initiative to revive the crisis-hit economy carried out during Renzi's 26-month mandate.

The Jobs Act has given employers more flexibility to hire and fire workers, also dismantling a law that made it very difficult for any company with more than 15 employees to fire workers.

Previously, the Italian labor market had earned criticism for being too rigid, forcing companies to offer workers temporary, thus insecure contracts to avoid having to offer them contracts for life.