Moody's Lifts Italy's Outlook With Rating Affirmation on Improved Fiscal Profile
Moody's has upgraded Italy's outlook to positive from stable while affirming its long-term ratings at Baa3. This decision reflects Italy's improved fiscal performance in 2024, a stable political environment, and a strong labor market. However, challenges remain due to high debt levels, weakening debt affordability, and an aging population.
Moody's on May 23 raised the outlook on the government of Italy to positive from stable while maintaining the long-term issuer and senior unsecured ratings at Baa3.
The positive outlook is based on Italy's improved fiscal outlook after a "better-than-expected" fiscal performance in 2024, a stable domestic political environment, a robust labor market, sound household and corporate balance sheets, and a healthy banking sector.
The affirmation, meanwhile, points to Italy's large economy, effective institutions, and governance weighed against the country's high debt burden, weakening debt affordability, and ageing population.
