The International Monetary Fund is praising Italy for having taken "bold steps" to heal its finances but says the government needs to do more to get "unacceptably high" unemployment down.

In a report at the end of its annual visit to the country Thursday, IMF officials said market sentiment is still "fragile" and that Italy's reform efforts are far from complete.

It urged Premier Enrico Letta's government to push through further reforms to boost growth and jobs.

Italy's unemployment rate was 12.2 percent in May, though its youth unemployment rate was 38.5 percent, far higher than the 23.1 percent rate across the then 27-country European Union.

EU leaders have agreed to put aside 8 billion euros ($10.4 billion) starting next year, on top of funding from other European funds and institutions, to ease unemployment among the under-25s.