(Reuters) -Credit ratings agency S&P upgraded Italy’s ratings to “BBB+” from “BBB” on Friday, citing improved economic, external and monetary buffers amid rising global headwinds and the progress made in stabilizing public finances since the pandemic’s onset.
“We see mitigating factors that may partially offset the impact of declining global demand this year on Italy’s GDP,” S&P said in its report.
On Wednesday, Italy committed to keeping its budget deficit in check even as it slashed its economic growth forecasts amid market turmoil over U.S. trade tariffs.
According to S&P, the U.S. administration’s decision to impose a milder 10% tariff means the hit to Italy’s economy and current account will be manageable, partially cushioned by accelerated public investment and the German fiscal stimulus.
“S&P’s judgment rewards the seriousness of the Italian government’s approach to budget policy,” said Economy Minister Giancarlo Giorgetti.
“In the general uncertain climate, prudence and responsibility will continue to be our line of action,” he said.
The agency also affirmed Italy’s outlook at “stable”.
(Reporting by Unnamalai L and Gavin Jones; Editing by Alan Barona)
