Despite signs of economic growth across Europe, Italian businesses are failing at a faster rate.

The combination of weak economic activity, worsening credit conditions and rising unemployment is hurting domestic companies, which are facing increased financial difficulties.

Istat, the national statistics bureau, reported earlier this month that Italy’s gross domestic product fell 0.2 percent in the second quarter following a 0.6 percent contraction in the first three months of 2013. Economists had broadly forecast a second-quarter contraction of 0.4 percent to 0.5 percent.

While better than expected, the picture still looks bleak. A recent human-rights report found that financially related suicides increased by 40 percent in the first three months of the year, compared with the same period in 2012. Half of those deaths were attributed to the "precarious" economic situation in the country, and 28 percent because of loss of employment.

Capital Economics European Economist Ben May expects Italy to remain in recession until mid-2014, adding that any recovery thereafter will be rather subdued.

Around 6,500 Italian companies closed down operations and went bankrupt in the first half of this year, a 5.9 percent rise from the year-ago period, according to a report released by the Chamber of Commerce of Monza and Brianza. And it’s not just new businesses that have been hit hard by the economic crisis. Between 2008 and 2012, roughly 9,000 firms that had been operating for more than 50 years closed their doors.

In addition, 22 percent of all the companies that filed for bankruptcy between January and June were located in the northern region of Lombardy, one of Italy's richest areas. Furthermore, some 126,000 companies are undergoing insolvency proceedings or negotiations with creditors.

More than 45,000 companies went bankrupt in Italy between 2009 and 2013, according to Stratfor, a geopolitical intelligence firm, which cited data from the Cerved Group and CRIF. From 2008 to 2012, there was a 64 percent increase in annual bankruptcies.

The sector worst hit between 2009 and 2013 was construction, which accounted for 20 percent of all bankruptcies. Wholesale trade followed with 13 percent of all bankruptcies. These numbers are similar to those in Spain, where the crisis also hit the construction sector the hardest after the real estate bubble burst with the international financial crisis, according to Stratfor.

Southern Europe’s messy debt crisis isn’t the only culprit behind the spike in bankruptcies. Italy already was dealing with low growth. Between 2003 and 2007, the country saw 1.3 percent growth on average, while France grew 2 percent and Spain grew 3.5 percent.

Meanwhile, labor costs have been on the rise and companies have been finding it increasingly difficult to secure a bank loan. Not to mention the fact that Italy has the second-highest interest rates in the European Union, surpassed only by Spain.

And things aren’t getting much better from here.

May expects the government debt to rise from 133 percent of GDP in 2012 to over 140 percent in 2015, compared to the government’s forecast for a fall to 126 percent. According to May, Italy might eventually need some sort of outside financial assistance to bring the average interest rate that it pays on its debt down, either via European Central Bank bond purchases or a full-blown bailout. But if Italy suffers from a sustained period of deflation and lackluster real GDP growth in the medium term, a substantial debt restructuring might be the only way to bring debt down to a sustainable level.

“It is too soon to conclude that the crisis in Italy is nearing an end,” May said.