Fitch confirms Italy's 'BBB' rating. According to the agency, Italy's growth "exceeded expectations in the first quarter of 2023" as a result of the easing of the gas crisis, a strong recovery in tourism, and strengthening global demand. In light of these developments, Fitch has raised its growth forecast for Italy in 2023 to +1.2% from +0.5% previously. "In 2024, we expect growth of 0.8%, which is slower than the 1.3% forecast in March," the agency said in a statement. According to Fitch, Italy's public debt is expected to fall to 142.3% of GDP in 2024, down from 144.4% in 2022. However, debt remains above pre-pandemic levels, when it reached 134.1% in 2019, and at the average of countries that have a BBB rating. "The Italian government has a stable majority in parliament and strong voter support. Given this and the fragmented opposition, we believe the government can serve out its entire term." According to Fitch, 'political stability' allows the government to implement a medium-term strategy. In any case, Fitch warns, the coalition may face pressure to deliver on campaign spending promises.
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