breaking latest news – Fitch confirms Italy’s rating at a ‘BBB’ with stable outlook. The rating, explains Fitch, “is supported by a diversified and high value-added economy, by belonging to the Eurozone, by solid institutions and by a GDP per capita which is more than double compared to the average of countries similar to Italy”. These credit characteristics are counterbalanced by weak macroeconomic and fiscal fundamentals, in particular a very high public debt, a relatively accommodative fiscal stance after the pandemic, limited economic growth potential and, more recently, an environment of higher yields.
“The growth of the Italian economy has exceeded our expectations in the first quarter of 2023, clearly recovering to 0.5% q/q (pre-March forecast -0.2%) thanks to the significant easing of the natural gas crisis in Europe, a strong rebound in tourism and the strengthening of global demand”. Fitch announced it, adding that as a result of this the forecasts were revised upwards “for 2023 to 1.2% from 0.5% previously”. “In 2024, we expect the economy to expand by 0.8%, a slowdown compared to the 1.3% expected in March, due to more restrictive financing conditions, concluded Fitch.
“The government enjoys a stable majority in Parliament and strong support among voters. In light of this and the fragmented opposition, we believe it is possible that the government will last an entire legislature, something uncommon in the Italian political system”. Fitch underlines this, underlining that “this political stability creates space for the government to develop a medium-term strategy and concentrate on the effective deployment of funds” linked to the Pnrr.
However, the rating agency continues, “the coalition may face pressure to meet more campaign spending commitments, especially as cost-of-living support runs out and the loss of purchasing power becomes more apparent, which can pose a risk to the prospects for fiscal consolidation”.
Giorgetti: “The serious work of the government inspires confidence in the markets”
“The serious, responsible and discreet work that the government is doing and which inspires confidence in partners and markets is perceived”, the economy minister told Tg1 Giancarlo Giorgetticommenting on the agency’s verdict on the sidelines of the G7 in Japan.
Go to the article