The Italian economy expanded for the second consecutive quarter in Q2 following three years of contraction. The 0.5% expansion marked the highest growth rate since Q2 2011 and was a significant improvement compared to the timid 0.1% growth recorded in Q1. Recent economic data, however, paint a mixed picture of the economy at the start of Q3 and suggest that the recovery is resting on a weak foundation. While the PMI reached an over-four-year high in July and consumer confidence increased in August, business confidence fell to a three-month low in August. Meanwhile, Prime Minister Matteo Renzi’s approval ratings fell to record lows in August and growing popular opposition to the government’s reform plans, as well as a fragile parliamentary majority, cast doubts about whether Renzi’s agenda can be achieved. Despite the challenges, on 25 August, Renzi reaffirmed his determination to push ahead with reforms and dismissed suggestions that he may need to hold early elections.