In a significant development for the Italian economy, Moody’s Ratings has upgraded Italy’s sovereign credit rating for the first time in over two decades. The agency raised Italy’s rating by one notch to Baa2, accompanied by a stable outlook. This marks a positive shift for the Eurozone’s third-largest economy.
According to Moody’s report, the upgrade reflects a sustained period of political and policy stability, which has enhanced the effectiveness of economic, fiscal, and investment reforms implemented under the National Recovery and Resilience Plan. The agency also projects a gradual decline in Italy’s high government debt burden starting in 2027.
This move by Moody’s is the fourth such action this year from a major credit rating agency. S&P Global Ratings upgraded Italy’s rating in April, while Fitch Ratings followed suit in September. Smaller agencies have also taken similar steps, with Morningstar granting Italy its best rating in seven years last month. SCOPE Ratings is also reportedly considering a similar upgrade.
Italian Finance Minister Giancarlo Giorgetti hailed Moody’s upgrade as evidence of the success of Italy’s fiscal efforts. In a statement, he stated that it is a further confirmation of renewed confidence in the government and, consequently, in Italy. This upgrade could lead to lower borrowing costs for Italy and attract more foreign investment.
The improved rating reflects growing confidence in Italy’s economic outlook and its ability to manage its debt. It is a welcome sign for Prime Minister Giorgia Meloni’s government, which has been working to implement reforms and boost economic growth.
