There are phases of the economy in which i sovereign ratings they assume even exorbitant importance for the stability of the financial markets and moments in which they are much less so. The extent of the global economic emergencies, with galloping inflation and a war on Europe's doorstep, certainly does not put the publication of ratings at the forefront of the concerns of national governments. In any case, for a country like Italy which has to manage a huge state debt (over 2.700 billion euros), it is still a question of alerts to consider to better weigh the perception from the outside by the large rating agencies.
DBRS Morningstar rating on Italy
The latest rating update in chronological order is the one published a few days ago by the agency DBRS Morningstar, which confirmed the rating of the Italian Republic at BBB (high).
Therefore, there is nothing new in terms of our appeal with respect to forthcoming sovereign debt issues, Italy is not currently a "special observer" of international markets, indeed it continues to collect good results on the economic front.
The economy grew in the third quarter by 0,5% and 2,6% on an annual basis. An excellent figure if compared to the Eurozone average which records a meager growth of 0,2%.
In the coming quarters, the main risk highlighted by DBRS Morningstar concerns the vulnerability of the Italian economy compared to the energy supplies and cost of bills, especially for businesses.
The modest recession that could arrive in 2023 does not frighten investors, because in the medium term, in any case, the engines of the Italian economy will become fully operational. public investments of the Pnrr.
Italy's strong points according to DBRS
According to the German rating agency, the rating on the Italian economy has a positive effect on the future of the Italian economy solidity of a national manufacturing sector which has so far demonstrated a high degree of resilience, despite the aforementioned frenzy from high energy prices. Also, the private sector debt remains among the lowest in Western countries and the household savings and companies' deposits increase with each survey, factors that bode well also for absorbing the impact of inflation and new energy costs in a non-traumatic way.
Il Italian banking system it is considered stronger than in the past, both in terms of capitalization and as regards the progressive reduction of non-performing loans which has been completed in recent years.
Special observed policy: the use of Pnrr funds is fundamental
According to DBRS Morningstar analysts, it is worrying looking ahead the endemic weakness of the political system Italian which, despite a clear victory of the right-wing coalition in the last general elections, could still record dangerous fibrillations deriving precisely from the parties that make up the government majority itself. Even if the executive headed by Giorgia Meloni seems keen to review some measures of the PNRR, substantial changes in resource allocation are seen as unlikely. More reasonable to think that a part of the European funds could instead be reassigned in agreement with the European Commission for counter the impact of the energy crisis.
There are therefore no stress scenarios on the horizon for the Italian rating, even if from the outside some macro-problems are increasingly visible and represent a sword of Damocles for the sustainability of public finances in the long term. There historic low GDP growth Italian is largely caused by low labor productivity, low participation of women in work and an unfavorable demographic, which in the future threatens the center of gravity of the country's pension system. In this phase of calm which protects the price of Italian Treasury bills, the key to ensuring the trust of agencies and investors beyond the strict contingency is represented by thestrategic use of European funds from the PNRR, an appointment that the Italian economy absolutely cannot ignore, also to improve the country's strategic infrastructures and the productivity of the industrial system.
