Finance
Moody's lifts outlook on Italy to 'positive' as finances improve
Published by Global Banking & Finance Review®
Posted on May 23, 2025
2 min readLast updated: January 23, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on May 23, 2025
2 min readLast updated: January 23, 2026
Moody's upgraded Italy's outlook to positive, citing fiscal improvements and political stability, aiding government financial plans.
(Reuters) -Credit ratings agency Moody's on Friday upgraded its outlook on Italy to "positive", in a boost to Prime Minister Giorgia Meloni's efforts to tackle strains on the country's finances and manage debt.
Moody's also maintained its "Baa3" rating on Italy and said its update in outlook from "stable" followed a "better-than-expected" fiscal performance last year and a "stable" political environment, which would support the Italian government's plans.
"The positive outlook is also supported by a robust labour market, sound household and corporate balance sheets and a healthy banking sector," Moody's said in its report.
Italy's Economy Minister Giancarlo Giorgetti welcomed Moody's outlook revision.
"Moody's evaluation is the result of a serious and silent work we have been carrying out since the beginning of the government," Giorgetti said in a statement.
Last month, rival ratings agency S&P raised its rating on Italy to "BBB+" from "BBB", in a surprise move that came just days after Meloni's government slashed its forecast for 2025 GDP growth to 0.6% from 1.2%.
Despite the weak growth outlook, clouded by uncertainty over U.S. trade tariffs, Rome confirmed its previous budget deficit commitments, estimating a deficit of 3.3% of GDP this year and 2.8% in 2026.
Italy's public debt, proportionally the second-highest in the euro zone after Greece's, is projected to be 136.6% of GDP this year, marginally down from the 136.9% target set in September.
(Reporting by Pushkala Aripaka in Bengaluru and Gavin Jones in Rome; Editing by Mohammed Safi Shamsi)
Moody's upgraded its outlook on Italy to 'positive' and maintained its 'Baa3' rating, citing better-than-expected fiscal performance and a stable political environment.
Italy's Economy Minister Giancarlo Giorgetti welcomed the revision, stating that it reflects the serious work undertaken by the government since it took office.
Italy's public debt is projected to be 136.6% of GDP this year, while the government estimates a budget deficit of 3.3% of GDP for this year and 2.8% in 2026.
The positive outlook is supported by a robust labor market, sound household and corporate balance sheets, and a healthy banking sector.
Last month, S&P raised its rating on Italy to 'BBB+' from 'BBB', shortly after the government revised its GDP growth forecast for 2025.
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