S&P confirms Italy's rating: BBB+ with positive outlook

S&P Global Ratings maintained its outlook on Italy at positive and affirmed Italy's long-term foreign and local currency sovereign ratings at 'BBB+/A-2'. The rating agency communicates this. “The positive outlook statement reflects that we expect a gradual improvement in Italy's external position, in line with a long-term structural trend,” S&P writes, “We expect Italy's narrow net external debt, our preferred indicator of external indebtedness, to fall below 150% of current account receipts by 2028, even as rising oil imports weaken the current account surplus in 2026. Such resilience is partly due to the strength of Italian goods exports despite US tariffs. We are seeing the benefits of an ongoing structural trend of recurring current account surpluses since the 2013 sovereign debt crisis. While we expect surpluses to ease due to high energy prices and increased competitive pressure from Asia, we expect the surplus trend to persist."

“The positive outlook reflects our expectation that, despite persistent uncertainty in international trade and energy prices, Italy's diversified private sector will continue to support current account surpluses (albeit more slowly),” explains S&P. “This will benefit the net position of the economy's foreign creditors vis-à-vis its global trading partners, while the public sector will gradually reduce its net borrowing, allowing for a slow decline in public debt by 2028.”

The rating agency explains that it could consider «a lowering of the rating if Italy's economic, external or budgetary situation were to deteriorate significantly compared to our forecasts. This could occur, for example, if uncertainty relating to international trade or energy prices were to significantly undermine consumer and business confidence, together with Italy's external financial and budgetary situation."

In the rating improvement scenario, Italy is expected to continue to "strengthen its external financial position, if its economy proves more resilient to trade and energy price shocks, or if it manages to reduce the public debt/GDP ratio". The confirmation of the rating with a positive outlook, explains the agency, "reflects our forecast of a gradual improvement in Italy's external position, in line with a long-term structural trend".