Fitch confirmed Italy’s rating a ‘BBB’ with positive outlook. The agency announces it. In the evaluation, between the strengths and weaknesses of the rating, Fitch stresses that the latter “is supported by its wide, diversified and high added value economy, by belonging to the eurozone and solid institutions compared to the median of the category ‘BBB’.”
The strengths of the rating
These strengths are balanced by weak macroeconomic and tax fundamentals, in particular a Very high public debt and a growth potential still low. In addition, Fitch highlights how these factors can negatively influence the country’s economic stability.
Positive prospects and medium -term risks
Fitch observes that the Positive perspectives They reflect reduced medium -term tax and financial risks, thanks to exceptionally high debt levels that have been managed more stablely. This was possible thanks to a better political stability and tax management.
Expected resilience and evaluation margin
The positive prospects also reflect a certain resilience Expected and an evaluation margin in the face of twenty economic and public finance against, deriving from high external risks and geopolitical uncertainties.
The deficit/GDP ratio
Also, Fitch continues in the evaluation, in 2024 the deficit/pill It was 3.4% (primary surplus of 0.4%), “exceeding our provisions of 3.7% and the forecasts of the October government of 3.8%”. The agency “provides that the deficit is reduced to 3% of GDP in 2025 and 2.7% in 2026”. And he continues: “Italy’s debt/GDP ratio was 135.3% in 2024, more than double the 54.7% of the GDP median ‘BBB’ and one of the highest among the peers with Ratting Fitch. The momentum of debt reduction It has recently been strong, since Italy has brought its debt to pre-plays levels, one of the few Eurozone countries to achieve this result “.
The political situation
And on the political situation: “From the general elections of 2022, the Italian political environment was stableproviding a medium -term economic and fiscal planning platform. We expect political stability to continue, supporting tax consolidation. In our opinion, tax credibility has increased and the 2025 budget underlines the government’s commitment to EU tax regulations. It also allowed Italy to guide EU countries in achieving the stages and objectives of the Next Generation EU (NGEU) initiative. In the past, weak and unstable governments have prevented the implementation of the reforms, leading to tax slips and contributing to the uncertainty of investors “.