Italy under the spotlight of the rating agencies, starting today with Standard & Poor’s

Italy under observation by international rating agencies. We start today with Standard & Poor’s, then Fitch will follow on May 3rd and Moody’s on May 31st. In the sights the debt rating tricolore, a key factor for maintaining public finances, already under pressure in the drafting of the Economics and Finance Document.

What to expect?

The expectations

Even if the global macroeconomic context appears complex, observers expect generally cautious judgments. While on the one hand the debt continues to set negative records, the expected trend in GDP does not appear brilliant but is not under pressure either.

The latest growth estimates released by the IMF ago see 2024 GDP increasing by 0.7% in 2024 and 2025, below the Government’s estimates (+1% this year and +1.2% next), but substantially in line with the large economies of the Old Continent. France – again according to Washington’s estimates – will mark a similar growth in 2024 (+0.7%) but double in 2025 (1.4%), while Germany will have to settle for a modest +0.2% (after -0.3% in 2023) but with a recovery to 1.3% in 2025.

In the meantime, there remain many things to understand, which risk having consequences on the economies of various countries, including Italy. In addition to the Middle Eastern crisis which today, following Israel’s response to Iran, has taken on greater significance, the prospects for monetary policy still need to be deciphered, with the ECB appearing to be oriented towards cutting rates in June and the Federal Reserve which should postpone the start of monetary policy later.

The latest reviews

But what are the latest opinions expressed by the rating agencies towards Italy?

• Last October, S&P’s did not ring any alarm bells, confirming Italy’s “BBB” rating with a stable outlook;

• Fitch’s opinion was similar, having left the rating unchanged at “BBB” with a stable outlook in November.
• Moody’s had instead revised the outlook for our country upwards from negative to stable, leaving the rating unchanged at ‘Baa3’.

Because the judgment of rating agencies is important

Rating agencies have as their main objective impartial and objective assessment of an entity’s solvency. Their judgment is therefore important as it provides crucial information for investing in the financial market. Investors, for example, rely on agency ratings to assess the level of risk associated with potential investments. Furthermore, the opinion of the rating agencies is important since it determines the conditions of access to credit for the entities subjected to evaluation.