Moody's Affirms Italy's Credit Rating And Upgrades Outlook

Washington, (APP - UrduPoint / Pakistan Point News - 18th Nov, 2023) The US ratings agency Moody's announced Friday it had affirmed Italy's credit rating at Baa3, and upgraded the country's outlook to "stable" from "negative," citing its significant economic strengths.

"The decision to change the outlook to stable from negative reflects a stabilization of prospects for the country's economic strength, the health of its banking sector and the government's debt dynamics," Moody's said in a statement.

It added that the decision to maintain Italy's credit rating above junk status at Baa3 is supported by its "significant economic strengths, including its robust manufacturing sector, high household wealth, and the low indebtedness of the private sector."

Moody's joins rivals Fitch and S&P Global Ratings in reaffirming Italy's investment-grade rating in recent weeks, providing a much-needed boost to the economic plans laid out by Prime Minister Giorgia Meloni's hard-right government.

"I welcome this evening's ruling with great satisfaction," Italy's economy minister Giancarlo Giorgetti said in a statement.

"It is a confirmation that, despite many difficulties, we are working well for the future of Italy."

Despite the radical past of her government, which also includes Matteo Salvini's far-right League, Meloni promised to follow a path of budgetary responsibility.

But in September, Rome raised its deficit forecasts to reflect a plan to finance an election promise to cut taxes for families with the lowest incomes -- sparking an immediate reaction from the markets.

Ten-year borrowing rates rose sharply, with the gap between Italian and German rates -- the closely watched "spread" -- temporarily exceeding 210 points.

\