BofA Global Research outlines six key questions for investors watching Italy in 2026. The most immediate is a weak household consumption recovery, with savings rates at their highest since 2021. Labor market strength is another focus, but productivity lags behind the euro area, particularly in construction.

Execution of the Recovery and Resilience Plan is a major hurdle. Italy has spent just 49% of its allocation, leaving €100 billion to deploy. Public finances are tightening, with deficit targets revised downward, but public debt remains a vulnerability as interest costs rise.

Political stability appears likely, with no major risks before the 2027 election. The core challenge is growth potential, projected at just 0.7% for 2026. The final question is whether the recovery plan's reforms can finally lift productivity, a test Italy cannot afford to fail.