Fabio Fois from Barclays has upgraded his.....>

ITALY: Fabio Fois from Barclays has upgraded his Italian 2017 GDP forecast to

1.5% from 1.3%. However, this is still expected to slow in 2018, although to

1.2% instead of their previous 1.0%. Furthermore "Risks remain tilted to the

downside, in our view, owing to significant uncertainty stemming from fiscal

politics next year."

- The slowing in growth will occur should "temporary tax credits deployed by

authorities to promote long-term employment and investments not be extended".

Barclays acknowledge that the government would wish to extend such credits in an

election year but Stability and Growth pact promises provide little scope.

- A big risk is politics with "the current unbalanced voting system, the risks

of a hung Parliament are non-negligible".

- so that the Italian credit could be seen in a poor light "unable to deliver

rapid, smooth or effective structural reforms needed to increase productivity

and unleash higher and self-sustainable potential growth and put public debt on

a steady downward trend"