The Italian economic environment according to Moody’s
Recently, Moody’s confirmed Italy’s rating at ‘Baa3’ with a stable outlook, thus closing a cycle of revisions that also involved other rating agencies such as Fitch and S&P. This decision, while reassuring, must not hide the significant challenges that the country faces. The agency highlighted the slowdown in economic growth, with forecasts of an increase in GDP limited to +0.9% in 2025 and +1% in 2026, negatively influenced by
the German economic situation.
Public debt and fiscal deficit
Another crucial point raised by Moody’s concerns Italian public debt, expected to increase to 139.7% of GDP in 2024 and more than 143% by 2027. Although the fiscal deficit is expected to fall to 4.6% of GDP in 2024, compared to 7.2% in 2023, this reduction will not be enough to reverse the growing trend in debt. The agency pointed out that average debt costs are increasing, with interest payments that could reach 8.2% of revenues in 2025
.
The National Recovery and Resilience Plan (PNRR)
Moody’s has also expressed concern regarding the implementation of the National Recovery and Resilience Plan (PNRR). Although the funds continue to support the economic outlook, the results achieved so far have been described as ‘conflicting. ‘ The agency warned that it will be challenging for Italy to spend all available resources by the end of 2026, highlighting the need for more effective management of public funds
.
The reactions of the Italian government
The Minister of Economy, Giancarlo Giorgetti, commented on the economic situation, calling it complex and stressing the need for sacrifices to keep the accounts in order. He also highlighted the successes achieved thanks to a prudent approach, such as the reduction of the spread and the improvement of the outlook by some rating agencies. However, the current economic maneuver presents several challenges, including the issue of the RAI fee, which is blocking the tax decree in the Senate
.
Conclusions and future prospects
In summary, the confirmation of the rating by Moody’s represents a sign of stability, but the economic challenges remain significant. The need for structural reforms and more effective management of public resources is essential to ensure long-term sustainable growth. With the wait for the summit between Italian political leaders, the country’s economic future will depend on the ability to face these challenges effectively
.