The S&P agency confirmed the rating on the Italian Republic at BBB / A-2 with a positive outlook. The decision was motivated in light of the turning point that could come thanks to the reforms – which the Italian government aims to finalize by the end of June – of justice, public procurement and competition. S&P believes that these reforms will unblock inflows of Next Generation EU funds worth more than 2% of GDP per year between 2022 and 2026. The US agency has cut Italy’s growth estimate for 2022 to 3 , 1% from 4.4% initially forecast.
The positive outlook – he explains – “reflects the broad pro-growth reforms that the Italian authorities are implementing as part of the National Recovery and Resilience Plan”. These reforms – he adds – “aim to improve the Italian business environment and the effectiveness of the judicial system, reduce bureaucracy, increase participation in work and finance investments in renewable energy. In the long term, the reforms – and their funding under the PNRR – are expected to mitigate the risks to the Italian economy stemming from the conflict between Russia and Ukraine (according to S&P’s basic expectation that the situation will not escalate until include NATO members).
For 2022, the agency expects a general government budget deficit equal to 6.3% of GDP, an estimated value assuming that the measures introduced at the end of 2021 to mitigate the energy shock remain in force at least until the end of this. year. S&P points out how the rise in energy prices has pushed inflation in Italy to the highest levels of the last 30 years, complicating the efforts of the ECB to normalize monetary policy. However, it is recalled, “the high inflation provides some fiscal benefits and is linked to S & P’s projection of a sharp decline in debt to GDP this year”.