According to polling agency Termometropolitico, which released a poll on January 11, the Five Star Movement is the most likely to win the upcoming election, with 29 percent of the vote, followed by Renzi's Democratic Party with 24 percent of the support and former Prime Minister Silvio Berlusconi's Forza Italia with 15.3 percent. However, none of them seem well placed to get a majority and form a solid one-party government.
"Our baseline forecast is that the election will yield a hung parliament. The center-right will be the largest coalition and the (Five Star Movement) will be the largest party, but no formation will win an outright majority," Ceretti from the EIU told CNBC, adding that Berlusconi's party will be a key player in any workable coalition.
Berlusconi's conservative party is running in this election with two coalition partners – the Eurosceptic Northern League and the far-right Brothers of Italy party. However, the media mogul cannot become prime minister once again, as he is currently barred from public office.
Nonetheless, his influence in the election cannot be discarded. According to Francesco Filia, chief executive officer at Fasanara Capital, "Berlusconi has always been very popular in Italy in the last 20 years and more. His approval ratings have always been very, very strong and I wouldn't be surprised if this was another hat trick from him this time around again."
Berlusconni has previously won three elections.
"Government formation talks will be difficult but should eventually yield an unstable, left-right government centered on the Democratic Party and Forza Italia. The administration will be weak, and we do not expect it to pass any major structural reforms," Ceretti warned.