Italy: S&P, Fitch reaffirm BBB Rating
Fitch's outlook improves to “positive” due to “strengthened budgetary performance and commitment to adhere to EU budget rules”
In good news for the Italian government, days after the controversial budget measure was passed, S&P and Fitch reiterate the BBB rating in estimates released on October 18. On the same day, BTP multi-year Treasury government bonds hit a new three-year spread low (117.4 points).
Further, Fitch upgraded the outlook to positive. “The positive outlook reflects the fact that the recent improvement in financial performance and the commitment to comply with EU budget rules point to a potential reduction in medium-term fiscal and financial risks arising from Italy’s exceptionally high debt levels. This is supported by signs of stronger potential growth and a more stable policy environment,” Fitch said in a statement.
At the same time, the S&P explains that, according to their projections, “the deficit will fall below 3% of GDP by 2027, and the primary balance will return to surplus by 2025,” even if there is a deterioration in public debt still caused by the effects of Superbonus (a construction stimulus measure launched in 2020).
Italian Economy Minister Giancarlo Giorgetti commented on this, explaining that “the assessments of the rating agencies are the result of responsible actions of this government that lead to the credibility of Italy.”