Just over 458,000 births were registered last year, 15,000 less than in 2016, in what is the second most ageing population in the world after Japan.
According to ISTAT, the new figures confirm a downward trend which began in recent years, with 120 thousand births less than 2008.
The drop is partly due to a decline in the number of women of child-bearing age in Italy to 12.8 million, around 900,000 fewer than in 2008, and an increase in infertility.
Another factor is the recent sharp drop in weddings, which reached its lowest level in 2014 (189,765 marriages, down 57,000 compared to 2008).
In 2015 and in 2016, marriages increased compared with the previous year, but in 2017 they dropped again to 191,287 marriages, 200,000 less than in 2016.
The report found that in 2017, almost 70 per cent of babies were born in wedlock, proving the link between marriage and births in Italy continues to be strong.
Last year, the average number of children per woman also dropped to 1.32, compared with 1.46 in 2010.
Across different generations, the average number of children per woman decreased from 2.5 for women born in early 1920s, to 2 children for women of the post-war generations (1945-49), to an estimated 1.44 children for women born in 1977.
Over the same period, there was a relevant increase in the proportion of child-free women: 11.1 per cent for the 1950 generation, 13 per cent for the 1960 generation and 22 per cent for the 1977 generation.
Italy’s populist government last month announced plans to reward parents who have a third child by giving them a portion of land, in a bid to reverse the country’s dropping birth rate.