S&P Global Ratings presented today the 2024 Outlook for global credit and for the economy of the Eurozone and Italy as well as for Corporate broadcasters and the sector Italian banking.
“We expect to see the full effects of the post-pandemic in 2024”he has declared Barbara CastellanoManaging Director of S&P Global Ratings, explaining “the post-pandemic period has brought about structural changes and these are now visible in economies. The most macroscopic change was the rise in interest rateswhich we believe is now structural and therefore we will pay particular attention to the issue of refinancing during this year”.
Refinancing at lower ratings
“I refinancing they are particularly risky for lower ratings. Globally, the amount of debt for ratings that are B- less or lower is equal to 1,200 billionso this is a relevant topic, because the difficulty of refinancing can clearly lead to an increase in the default rate over the next year.”
“There are some geopolitical and economic elements that we keep monitored because if there was an exacerbation of existing conflict situations in the world, this could obviously be a catalyst. We then expect a soft landing per l’economiabut if the situation were to be worse than we expected, this is an element that we will have to consider and recalibrate in our analyses.”
Focus on businesses
Renato PanichiSenior Director of S&P Global Ratings delved into the topic of Corporate ratings of Italian companies. “We expect one stability of creditworthiness of Italian companies, in line with the European average, indeed in some respects even better than the European average, despite the fact that it is a context characterized by some challenges: think of the high interest rates that are starting to have their effects on businesses, the geopolitical risks and the economic slowdown in Italy. All in all, however, to date the majority of Italian companies covered by ratings have a stable outlook“.
“An aspect to highlight – underlined the expert – is that of investments: Italian companies like those in much of Europe continue to invest and this is a fundamental trend from our point of view”.
Focus on energy transaction
“In the next 5 years competitiveness will need to be redesigned a bit of businesses and country systems, especially in light of the energy transition and digitalisation, so in this sense it is important that we put in place the conditions to be competitive and therefore continue to invest”.
“On pperformance of the sectors – added Panichi – it will be quite differentiated: We have seen some sectors that have performed worse than market expectations, particularly the sector basic materials, for example the chemical sector, mainly due to the drop in raw material prices; however, there were other sectors that were a little more resilient in the services sector, especially those related to turismo“.
The banking system is strong
One more focused look at the banking sector highlighted a certain solidity of the sector. “We believe that the Italian banking system is well equipped to cope a context cheap probably harder over the course of 2024, but quite similar to what we saw in 2023,” he said Mirko SannaLead Analyst di S&P Global Ratings.
“We expect a slight deterioration in credit quality during the year”, continued the expert, adding “it is true that during 2023 Italian banks achieved better results than we expected, probably because the economy performed better, but also because we saw The effects of structural improvements chand the Italian banks have implemented in the management of credit risk”.
“This will continue throughout 2024, we believe deterioration in credit quality will be manageable and the increase in credit losses will be more than compensated by an interest margin which remains sustained even if slightly decreasing in the second part of the year”.
(Teleborsa)