Italy is gradually emerging from its worst recession in decades but its economy will expand just 0.7 percent this year, the International Monetary Fund (IMF) said Tuesday.
"The recovery is still fragile, and medium term prospects are held back by structural bottlenecks, high unemployment, weak balance sheets, and elevated public debt," it said in the report.
A stronger economic recovery in 2016 will see growth of 1.2 percent, the IMF forecast.
Italy's growth is the weakest in the eurozone, it noted.
The IMF urged Rome to push ahead with deeper reforms to overhaul Italy's political and economic system and fiscal 'rebalancing' continue to cut high taxes on labour and capital.
The report was completed in mid-June after bilateral consultations with Rome and is substantially in line with current government growth forecasts.
The government predicts the Italian economy will grow 0.7 percent growth this year and 1.4 percent in 2016.