Italy passes the Fitch test, growth estimates raised: “The government will last”. Giorgetti: the markets have confidence

Italy passes Fitch’s test. The rating agency confirms its BBB rating with a stable outlook and, forecasting a decline in public debt in 2024, revises its growth estimates upwards for 2023. «The recent Stability Program sets credible budget targets, in a continuity of the fiscal policy of the previous government of national unity» affirms Fitch, emphasizing how the estimates contained in the program – which envisages a gradual consolidation of the deficit – are in line with its projections. The Italian GDP “exceeded our expectations in the first quarter of 2023” thanks to the easing of the gas crisis, the strong recovery of tourism and the strengthening of global demand, explains Fitch, explaining how in the light of these dynamics it has revised upwards growth estimates for Italy in 2023 at +1.2% from the previous +0.5%. “In 2024 we expect growth of 0.8%, slower than the 1.3% expected in March”, adds the agency, noting how the Italian recovery is in any case slower than that of the euro area.

The bills

On the inflation front, Fitch expects a slowdown in the price run, expected to drop to an average of 7.2% in 2023 and 3.5% in 2024 after having reached 8.7% in 2022. Speaking of credible budget plans», the rating agency observes that Giorgia Meloni’s government enjoys a «stable majority in Parliament and strong support among voters. In the light of this – it is stated – and of the fragmented opposition, we believe that it is possible for the government to last the entire mandate”. Political stability creates space for the “government for a medium-term strategy,” adds Fitch, warning that, however, the coalition could face pressure to implement the spending commitments made during the campaign. Fitch’s decision is in line with that of S&P which, last month, in turn confirmed its assessments on Italy.

Unknown Moody’s

Moody’s is now missing from the appeal: the agency will pronounce its decision on May 19 and the fear is that of a possible downgrade, a hypothesis raised in a report published by the Bloomberg agency. For now, however, the executive collects the results: “The serious, responsible and discreet work that the government is doing is perceived, and which therefore inspires confidence in the markets” says Economy Minister Giancarlo Giorgetti speaking to the microphones of Tg1 on the sidelines of the G7 meeting in Nigata, Japan.