Italy investment outlook remains uncertain

In Italy, bank lending to non-financial corporations have yet to turn, despite a sharp Q1 expansion, and this leads to more cautiousness on the investment outlook. 

Risks to the projected macroeconomic outlook are broadly balanced at this stage, although improving lately, domestic demand conditions remain fragile as unemployment remains uncomfortably high, but exports have room to accelerate more.

"This includes more decisive growth-friendly fiscal policy and additional labour market reforms such as improving the wage bargaining mechanism at the firm level to align productivity to nominal wage growth", says Barclays.