Italy Fitch confirms rating to ‘BBB +’, outlook stable – AGI – Agenzia Journalistic Italy

Rome – Fitch has confirmed the long-term rating of Italy at ‘BBB +’, outlook is stable. This was announced by the rating agency.

“The merit of Italy’s credit is supported by a great economy, high value added and diversified, with a moderate indebtedness of the private sector and a sustainable pension system “Fitch wrote in the report on Italy. These strengths are balanced by a high public debt and weak growth.

The debt amounted at the end of 2015 to 132.7% of GDP compared to an average of 42% of the rated countries to BBB +. Although the agency foresees a decline of debt this year, it will remain above 120% until the end of the decade, leaving Italy highly exposed to potential adverse shocks. The forecasts of Def 2016-2019, highlights the agency, in particular those on the deficit, “lightening continually MTO will damage the credibility of the same and increase the downside risks to our budgetary projections.”

the decline in the defcit in the period 2015-2016 is almost everything depended on by the decrease in interest costs. However the general elections (to be held in 2018 but could be anticipated) increase the risk that the medium-term path to a balanced budget, outlined in Def, is once again postponed. Regarding the banking sector, Fitch considers the Italian one characterized by “weak quality ‘asset and sectoral fragmentation”, In addition, Fitch expects an increase “of bank loans in 2016 although at a slower pace.” positive opinion on constitutional reform which, if will pass, “should lead to more effective policies that, together with the electoral law, should ensure more stable governments” in any case “political risks should be increased significantly if voters will reject the constitutional reforms in the referendum October, although not believe it is probable. ” The monetary policy of the ECB, Fitch concludes, “has supported the terms of the country’s financing. This should lead to a steady decrease in interest payments over the coming years.” The stable outlook reflects, ultimately, a balance of risks to the upside and downside. (AGI)