ROME (Reuters) - Italian employers group Confindustria trimmed its growth forecasts on Thursday and said it would take more than 10 years to return to pre-crisis economic output at the current rate of expansion.


The euro zone's third-largest economy stagnated in the second quarter, and Prime Minister Matteo Renzi's government is set to revise down its official growth forecasts later this month.


Confindustria now sees growth this year slowing even further from last year's 1 percent rate. It lowered its projection to 0.7 percent from its previous 0.8 percent and nudged down its 2017 forecast to 0.5 percent from 0.6 percent.


"We are failing to shake off this slow growth disease we have been suffering from since the beginning of 2000," Luca Paolazzi, head of Confindustria's research unit, said at a briefing to present its periodic report on the economy.


At the current growth rate, the point at which Italy can hope to regain pre-crisis economic conditions is "pushed back to 2028", Paolazzi said.


Economy Minister Pier Carlo Padoan said this week the government would revise down its forecasts, which currently stand at 1.2 percent growth this year and 1.4 percent in 2017.

A government source said the new projections would probably be 0.8-0.9 percent for 2016 and 1.0-1.1 percent for 2017. Most economists expect no more than 1 percent this year and an even weaker reading by the end of the next.

Confindustria's latest reduction comes after it slashed its forecasts in July following Britain's vote to leave the European Union. In Thursday's report, however, the group said the immediate consequences of Brexit had been "less serious than feared".

Public debt is set to total 133.3 percent of output this year, Confindustria said, against its previous 133.4 percent estimate. It raised its forecast for the average jobless rate in 2017 to 11.2 percent from 11.1 percent.

(Reporting by Antonella Cinelli, writing by Isla Binnie; Editing by Hugh Lawson)