The Italian economy "will stay on track". This is how Standard & Poor's promotes Italy and, despite the downward revision of GDP growth estimates to 1,1% in 2016 and 1,3% in 2017 (from 1,3% and 1,4% respectively % previous), confirms the judgment on our country.
Standard & Poor's Global Ratings announced, shortly after the closing of the Stock Exchange, that it confirmed the long and short-term rating at “Bbb-/A-3”, with a stable outlook. As stated in the Agency's note, the outlook reflects the expectation that "the Italian government will continue to implement structural and budgetary reforms that are comprehensive and potentially able to support growth, which will stabilize, and will begin to reduce, a debt/ Very high GDP”. The agency also considers the recent initiatives to support Italian banks and to reduce the high level of non-performing loans in the banking sector (Fondo Atlante) as "positive", although these initiatives "alone are not sufficient to fully address the problems connected".
The forecasts for the current year and for 2017 weigh on "the deceleration of economic activity in the second half of the year" and the "deterioration of the growth prospects of the major global economies". According to S&P, Italy's rating "is limited by the weakness seen in the performance of nominal and real GDP and by the erosion of competitiveness", which undermines the sustainability of public finances. Furthermore, the assessment "also weighs on a very large public debt", with the net general debt which is the third highest among the 130 countries assessed by the agency, after Greece and Japan. The high debt reflects the country's "uneven" history of meeting fiscal targets across the business cycle. "We believe that fiscal credibility is particularly important for countries with a high level of debt, such as Italy", whose debt last year was equal to about 130% of GDP, explains the agency.
