Moody’s Raises Italy‘s Credit Rating to Baa2, First Upgrade in Over Two decades
Rome – in a significant vote of confidence, Moody’s Investors Service has upgraded Italy’s sovereign credit rating to Baa2 from Baa3, marking the first increase in 23 years.The upgrade, announced today, reflects the rating agency’s assessment of Italy’s improving economic and political stability, and also progress in implementing its national recovery plan. The last time Moody’s raised Italy’s rating was in May 2002; it was downgraded in October 2018 and had remained unchanged since.
The upgrade acknowledges Italy’s commitment to fiscal obligation and structural reforms. Moody’s specifically cited ongoing political stability as a key factor in its decision. Italy’s Minister of Economic Affairs, Giancarlo giorgetti, expressed satisfaction with the news, stating, “This is a further confirmation of the regained trust in this government and therefore in Italy.”
Moody’s anticipates Italy’s budget deficit will fall below the three percent of economic output threshold this year, potentially allowing the country to exit the EU’s excessive deficit procedure by mid-2026. While forecasting a gradual decline in Italy’s ample government debt starting in 2027, the agency adjusted the outlook for the rating to “stable” from “positive,” acknowledging persistent challenges such as the country’s aging population.
