The rating agency Moody’s has revised its outlook for Italy upwards. Moody’s affirmed the rating at Baa3, the lowest rating of all investment grade ratings, but raised the outlook to “stable” from negative. Lowering the rating would have brought Italy to the so-called “junk” level.
Moody’s had decided to cut the outlook from stable to negative shortly after the fall of the Draghi government in July 2022, making the risk of sovereign debt default real. The first three assessments from S&P, Dbrs and Fitch had left the rating and also the outlook – i.e. the prospects – for Italy’s public debt unchanged, despite the economic slowdown highlighted in the reports.
“Italy’s short-term prospects are supported by the implementation of the Pnrr but also by recent improvements in the banking sector. Risks related to energy supply have declined partly due to the good weather last winter, but also due to government measures “to diversify supplies and strengthen energy infrastructure,” says Moody’s, emphasizing that the strength of the Italian banking sector “has improved significantly “The slow but gradual consolidation in the banking system has resulted in improved operational efficiency and an overall improvement in profitability.”
Giorgetti: “It is a confirmation that we are committed to the good of Italy”
“I welcome this evening’s verdict with great satisfaction. It is a confirmation that, despite many difficulties, we are working well for Italy’s future.” This is how Economy Minister Giancarlo Giorgetti commented on Moody’s verdict. “Against the background of the opinion of Moody’s and other rating agencies, we hope that the government’s prudent, responsible and serious budget policy will also be confirmed by Parliament, despite the justified criticism of a democratic system.”