Italy welcomes Moody's raising credit outlook from negative to stable
ROME, Nov. 18 (Xinhua) -- Italian authorities welcomed Moody's latest assessment, which maintained the country's credit ratings at Baa3, but upgraded the outlook from negative to stable.
In a comment released on social media, Economy Minister Giancarlo Giorgetti said he was "satisfied with the result."
Moody's Baa3 rating is the lowest level of investment grade, one step above non-investment, and, in its previous assessment in August last year, the agency had also assigned a negative outlook to Italian public debt.
The new assessment thus came as a relief for Prime Minister Giorgia Meloni's government, as having the debt downgraded to a "junk" status would heavily damage a country's ability to gain the trust of the markets.
In its announcement late on Friday, Moody's explained its decision to change the outlook from negative to stable reflected "a stabilization of prospects for the country's economic strength, the health of its banking sector, and the government's debt dynamics."
The new short-term outlook assigned to Italy was "supported by the implementation of the National Recovery and Resilience Plan (NRRP), but also by recent improvements in the banking sector."
"Risks related to energy supplies decreased in part due to the good weather last winter, but also to the government's actions to diversity supplies and strengthen energy infrastructure," it also said.
In August 2022, soon after former prime minister Mario Draghi resigned and snap elections were called, Moody's had assigned Italy's Baa3 rating a negative outlook based on the "political risks" hampering the country's ability to implement structural reforms.
Commenting on the new outlook, Giorgetti expressed hopes the Italian parliament would now "maintain the government's prudent, responsible, and serious budgetary approach included in the budget bill (for 2024)."
Worth some 24 billion euros (26.2 billion U.S. dollars), the new budget was approved by Meloni's cabinet in mid-October and would now need the green light from the two chambers of parliament -- both are allowed to ask for amendments -- by the end of the year.
Prior to Moody's latest report, S&P and Fitch agencies had confirmed their assessments of Italy's rating with a stable outlook.