Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

Moody's Raises Italy's Outlook from Negative to Stable

Sun 19 Nov 2023 | 08:14 PM
Taarek Refaat

Moody's kept the Italian economy's sovereign debt rating at Baa3 (one notch above junk rating) but, raised its outlook to stable from negative.

Most analysts expected Moody's to keep its rating and outlook on the Italian economy unchanged.

In August last year, the credit rating agency placed the third-largest economy in the euro zone under negative review, after the government collapsed amid the energy crisis.

Moody's said in its statement: The decision to change the outlook for Italy from negative to stable reflects the stability of the prospects for the strength of the economy, as well as the health of the banking sector and the dynamism of government debt.

Moody's was the fourth agency to review the situation of the Italian economy, as S&P Global, and Fitch kept Italy's outlook and credit rating unchanged.

The Minister of Economy commented on the decision, saying: This is confirmation that, despite many difficulties, Italy is working better for the future.

Italy's economy contracted in the third quarter on a monthly basis, officially entering a state of technical recession after a contraction of about 0.4% in the second quarter.

Last week, the European Commission expected Italian debt - the second highest debt rate in the euro zone - to rise from 140% of GDP expected this year, to 141% in 2025.

DBRS Morningstar had affirmed Italy's credit rating at three notches above the high-risk rating. This is the second time that Prime Minister Giorgia Meloni's government has been able to avoid a downgrade in the expected series of reviews.