Fitch upgrades Italy, giving it its first ratings upgrade since 2021. Citing "increased confidence" in the fiscal trajectory, the agency raised its rating one notch to 'BBB+' from 'BBB' . The outlook is stable.
"We have put Italy back on the right path," said Economy and Finance Minister Giancarlo Giorgetti .
The upward rating revision reflects "increased confidence in Italy's fiscal trajectory," "supported by increasing fiscal prudence and a strong commitment to achieving the short- and medium-term targets set out in the new EU fiscal framework ," Fitch explained, highlighting how "a stable political environment, continued reform momentum, and the reduction of external imbalances further improve Italy's credit metrics."
While noting higher debt and slower growth than BBB-rated countries, the agency expects "a reduction in financing and sustainability risks." GDP is expected to grow by 0.6% this year, then accelerate to an average of 0.8% in 2026-2027, with domestic demand taking the lion's share.
Fitch forecasts the deficit to decline to 3.1% in 2025, "demonstrating the solid performance of tax revenues. The government is likely to continue implementing modest tax relief measures, but is unlikely to jeopardize fiscal targets." The agency also notes that defense spending is "on track to reach 2% of GDP in 2025. We expect only limited additional defense spending in 2026-2027." Debt, on the other hand, is expected to rise to 137.6% in 2026, reflecting adjustments related to the super bonus.
The Prime Minister
"Italy receives a promotion from Fitch: confirmation that our government is on the right path . Balanced finances, responsible budgetary decisions, a strengthening economy thanks to increased employment: these are not slogans, but concrete results," said Prime Minister Giorgia Meloni . "It is a clear signal of confidence from international markets : political stability, credible economic policies, and support for those who create jobs and wealth are bearing fruit. We are aware of the challenges that lie ahead—growth, debt, sustainability—but today we can look forward with pride: our commitment is being recognized, and this gives us further strength to do more and more for Italy and its families," concluded Meloni.
