Fitch affirms Italy’s sovereign credit rating at BBB+ with stable outlook

Fitch has affirmed Italy’s sovereign credit rating at ‘BBB+’ with a stable outlook, citing recent political stability and fiscal prudence as key supporting factors. The agency noted that Italy’s large, increasingly diversified, and high-value-added economy, along with its membership in the EU and the eurozone, contributes to this assessment.

While institutional strength and solid governance indicators are positive, Fitch highlighted that the very high level of public debt and limited medium-term growth prospects remain significant constraints. These factors reduce fiscal flexibility and the capacity to reduce debt. For 2026, Fitch projects a deficit of 2.9% of GDP, which is more favorable than the median of 3.2% for other countries with a BBB rating, driven by prudent spending and a solid labor market.

Economic growth is expected to be supported by public investments, including the National Recovery and Resilience Plan (PNRR). However, a slowdown is anticipated from 2027 as inflation impacts consumption and support from the NextGenerationEU program begins to taper off. The agency also noted that political stability, including the longevity of Prime Minister Giorgia Meloni’s administration, has served as a pillar of strength for the rating.