S&P confirms Italia’s rating: BBB+ with a positive outlook

S&P Global Ratings has affirmed its positive outlook on Italia and has affirmed Italia’s long-term sovereign ratings, in both foreign and local currency, at ‘BBB+/A-2’. This was announced by the rating agency. “The ‘BBB+/A-2’ rating with a positive outlook reflects the fact that we expect a gradual improvement in Italia’s external position, in line with a long-term structural trend,” writes S&P, “we expect Italia’s narrow net external debt, our preferred indicator of external indebtedness, to fall below 150 per cent of current account receipts by 2028, despite rising oil imports weakening the current account surplus in 2026. This resilience is partly due to the strength of Italian goods exports despite US tariffs. We are seeing the benefits of a sustained structural trend characterised by recurring current account surpluses since the 2013 sovereign debt crisis. ‘Although we expect the surpluses to narrow due to high energy prices and increased competitive pressure from Asia, we expect the trend towards a surplus to persist.’

“The positive outlook reflects our expectation that, despite persistent uncertainty in international trade and energy prices, Italia’s diversified private sector will continue to underpin current account surpluses (albeit at a slower pace),” explains S&P. “This will benefit the economy’s net creditor position vis-à-vis its global trading partners, whilst 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 may consider ‘a downgrade should Italia’s economic, external or fiscal situation deteriorate significantly compared with our forecasts. This could occur, for example, if uncertainty surrounding international trade or energy prices were to significantly undermine consumer and business confidence, alongside Italia’s external financial and fiscal situation’.

Under the rating upgrade scenario, Italia is expected to continue to ‘strengthen its external financial position, should its economy prove more resilient to trade and energy price shocks, or should it succeed in reducing its public debt-to-GDP ratio’. The confirmation of the rating with a positive outlook, the agency explains, “reflects our forecast of a gradual improvement in Italia’s external position, in line with a long-term structural trend”.