03/05/2024 – 18:27
Fitch Ratings reiterated Italy’s long-term foreign currency rating at BBB, with a stable outlook. The rating is supported by the European country’s large and diversified economy, which is part of the euro zone and has strong political institutions, according to the agency.
Despite this, the institution warns of weakened macroeconomic and fiscal fundamentals, given a very high level of public debt. The company predicts that Italian Gross Domestic Product (GDP) will grow by 0.7% in 2025 and 1.3% in 2026. “Despite the large fiscal stimulus, we see some underlying strength, especially in the exports and services sectors,” it says .
Fitch adds that the rating’s stable outlook reflects the expectation that the fiscal deficit will fall to close to 3% of GDP by 2026, from 7.4% in 2023 and 4.7% projected for 2024. The agency, however, sees an uncertain path for the coming years. “We now expect the debt/GDP ratio to increase to 142.3% in 2027, from 137.3% in 2023, from a previously generally stable trajectory,” he says.
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