GDP, Fitch raises estimates for Italy from 0.5 to 1.2%: what it means – Corriere.it

Face to face between the president of the Eurogroup, Paschal Donohoe, and the minister of the Economy, Giancarlo Giorgetti, on the ESM, the European stability mechanism, better known as the State-saving Fund, whose reform has not only been ratified by Italy . The meeting took place on the sidelines of the G7 of finance ministers taking place in Japan. Giorgetti then explained that he had reiterated the “availability to dialogue on the treaty, if it is introduced in a framework of changes such as the temporary exclusion of expenses for digital and green investments, including those of the Pnrr”.

Donohoe took note of the requests but recalled how everyone, including Italy, agreed on the new Mes and that only Rome’s ratification is missing for it to enter into force. The negotiations therefore continue, but from distant positions and in a broader framework that holds together the release of the third installment of funding of the Pnrr and the reform of the Stability Pact.

Fitch’s assessment

The Fitch agency confirmed Italy’s debt rating at the BBB level, ie two levels above the junk category, and the “stable” outlook. The rating, explains Fitch, “is supported by a diversified economy with high added value, by belonging to the Eurozone, by solid institutions”. However, “a very high public debt” and “limited economic growth potential” remain, especially after the rate hike. “The growth of the Italian economy – continues the report – has exceeded our expectations”. As a result, estimates for 2023 GDP rise from 0.5 to 1.2%. According to Fitch, “the recently published Stability Programme” by the government “establishes credible fiscal targets”. However, there is a “marginal decrease in debt” and growing burdens on government bonds. However, the political framework sees a government with “a stable majority and strong support among the voters” while the opposition is “fragmented”. The government could therefore last “an entire term, which is not common” in Italy. Finally, the “banking sector is resilient and stronger” than in previous crises. However, the outlook remains uncertain. This is also highlighted by the Confcommercio-Censis survey, which highlights an apparent paradox: household confidence at its highest but consumption slowing down after the erosion of savings