S&P Global Ratings left its sovereign ratings on Italy unchanged, affirming “BBB+/A-2” for long- and short-term debt in both foreign and local currency, BigGo Finance reported on November 13.
The US agency also kept the outlook in positive territory. This move sets the stage for the nation to potentially rejoin the “A” tier of sovereign grades, a status Rome has not occupied since March 2013.
The evaluation rests on a broadly favorable reading of Italy’s external position. The private productive base, diversified and export-oriented, will continue to generate current account surpluses even in uncertain international trade conditions.
“Further confirmation that we are on the right path,” said Giancarlo Giorgetti, Economy Minister, as he commented on the decision.
S&P stresses that Italy’s resilience is partly attributable to the strength of goods exports. These shipments have offset the tariff measures introduced by Washington.
Net external debt is expected to fall below 150% of current account receipts by 2028. This drop comes despite an increase in oil imports that will weaken the surplus in 2026.
Recurring surpluses have accompanied Italy since the 2013 sovereign debt crisis. Energy costs and Asian competition continue to moderate those gains.
Debt stabilization will be less pronounced than in previous forecasts. A higher deficit target announced for 2027, an election year, is intended to fund increased spending on energy support and defense.
Upward pressure on yields complicates the macro-financial picture. The conflict between the United States and Iran has pushed energy prices and inflation higher, driving a rise in sovereign yields.
Yields on the 10-year BTp now sit above 4.40%, accompanied by a spread near 100 basis points compared to a January trough beneath 60. Following the vote, S&P anticipates a resumption of fiscal restraint along with lower off-budget expenditures linked to the Superbonus tax credit.
| Indicator | S&P Forecast |
|---|---|
| 10-year bond yield 2027 | 4.0% |
| Net external debt 2028 | Below 150% of current account receipts |
| Public debt trajectory | Stabilization by 2028 |
Foreign investors currently hold about 35% of outstanding government securities, versus 52% in 2010. In less than five years, those investors have increased their exposure by more than €280 billion.
Many funds can only buy bonds with high minimum ratings and still exclude BTps. An upgrade would broaden this investor base, encouraging the return of long-horizon funds and reducing volatility.
“A confirmation represents a success,” Giorgetti told BigGo Finance regarding the rating decision.
The agency affirmed Italy’s long- and short-term debt at “BBB+/A-2” in foreign and local currency on November 13, keeping the outlook positive.
The 10-year BTp offered less than 3.30% at the end of February but now trades above 4.40%, with a spread of around 100 basis points.
S&P expects net external debt to fall below 150% of current account receipts by 2028.
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