ROMA – S&P promotes Italy. The rating agency in fact confirms the BBB rating for our country but raises the otulook to “positive” from “stable”. The upward revision of Italy’s outlook by S&P is linked to the commitment of the Draghi government to carry out pro-growth reforms: “We expect a strong recovery driven by investments in 2021 and 2022”, with Italy’s GDP above 2019 levels a year ahead of forecasts “, writes Standard & Poor’s.
In the note, the rating agency explains the reasons for its choice on the outlook: “a clear strengthening of the commitment to pro-growth reforms, and the positive consequences that growth will have on public accounts”. S&P estimates for Italy GDP growth of 6% this year and 4.4% in 2022.
Alongside the brilliant investment trend, the agency writes, “we expect a budget deficit for 2021 of 8.8% of GDP compared to the government’s target of 9.4%, as revenues continue to exceed the assumptions of balance”.
Italy, Standard and Poor’s confirms the rating. “Resumption already in 2021, EU support is decisive”
The current promotion may not be the last: “we could raise our ratings if we see the Italian economy doing better than our forecast. In such a scenario, the country’s debt-to-GDP ratio would likely move on a steeper downward path than the our basic projections “.
As usual, however, the agency designs two scenarios, and alongside the hypothesis of improvement there is also the possibility of going back. In the future, S&P writes, “we may revise the outlook to stable if our projections of an economic recovery followed by backward fiscal consolidation do not materialize, or if the growing contingent liabilities stemming from extensive central government guarantees crystallize on its balance sheet. on a large scale”.
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