Moody’s unexpectedly upgrades Italy’s debt outlook to stable from negative, providing a boost for Prime Minister Giorgia Meloni’s government and the country’s economic prospects.
Moody’s Upgrades Italy’s Debt Outlook
In a surprising move, Moody’s has left Italy’s sovereign debt rating at Baa3, one notch above junk, but has upgraded the outlook to stable from negative. This unexpected boost comes as a positive development for Prime Minister Giorgia Meloni’s government.
Economy Minister’s Response
Economy Minister Giancarlo Giorgetti welcomed the announcement, stating that it confirms the government’s efforts to work towards the future of Italy. He expressed hope that the prudent, responsible, and serious budget policies of the government will be confirmed by parliament.
Economic Challenges and Outlook
The Italian economy faced stagnation in the third quarter, and analysts predict continued weak activity in the coming quarters. Additionally, the European Commission forecasted a marginal rise in Italy’s debt, which is the second-highest in the euro zone. However, the gap between yields on Italian 10-year bonds and their German equivalent has narrowed recently.