There was a lot of waiting for the judgment of Fitch on Italy’s rating. It arrived late on Friday evening: confirmed triple B with stable outlook, same rating maintained last November 10th. Good news for our country, with the Italian public debt passing another test, after those of recent weeks: the confirmation of S&P (BBB, stable outlook) and Dbrs (BBB-high, stable outlook). Now only Moody’s judgment is missing, scheduled for May 31st. The previous one, which dates back to last November, is Baa3, with the outlook raised from negative to stable.
In its communication Fitch notes that Italy’s rating “is supported by his broad economy, diversified and ad high added valuefrom belonging to theeurozone and from strong institutions“. Furthermore, the agency observes, public support for the Meloni government “remains strong, providing a platform for medium-term economic and fiscal planning”.
Italy’s fiscal deficit “will reduce – writes Fitch – to 4.7% of GDP this year (the government forecast is 4.3%) from 7.4% in 2023 due to the gradual elimination of the Superbonus and changes to its accounting from accrual to cash.” Precisely the expense for the Superbonus, Fitch points out, “has put the public debt burden on an upward trajectory in our baseline projection as it will feed into debt parameters over the next 10 years as credits are drawn down.”
For the agency “the reduced fiscal space due to the higher-than-expected spending of the Superbonus could increase tensions between the coalition parties”. As is known, the center-right executive recently stated that the extension of some one-off fiscal measures introduced in 2024 (equal to 0.7% of GDP) will be its priority. However, Fitch warns: “It may be difficult to implement without compensation measures, given the constraints of the EU fiscal rules.”
How the stock markets performed
Piazza Affari closed slightly down (FTSE Mib -0.15% at 33,678 points) after the news came out that 175 thousand new jobs were created in the United States in April, a figure decidedly below the estimates of analysts who they expected 238 thousand units. In March there were 315 thousand new jobs. The unemployment rate, which was 3.8% in March, rose slightly to 3.9%, against the forecasts of analysts who estimated it would remain unchanged. What consequences does a less strong US labor market have? It reinforces expectations that the Fed can break the deadlock and start cutting interest rates. The other European markets: Paris and Frankfurt advanced by 0.84% and 0.69% respectively while London gained 0.48%.
Wall Street closes higher: Dow Jones +1.18%, Nasdaq +1.99%.
