Italy has received its highest credit rating in more than six years after the global rating agency DBRS Morningstar upgraded the country’s outlook, marking a significant political and economic victory for Prime Minister Giorgia Meloni. The upgrade reflects renewed investor confidence in Italy’s fiscal discipline, economic reforms, and stability under Meloni’s government.
DBRS raised Italy’s sovereign credit rating to BBB from BBB-, citing improvements in fiscal management, better growth prospects, and the government’s commitment to maintaining public finances under control. This marks the first time since 2018 that Italy has achieved such a favorable rating, a notable milestone for Europe’s third-largest economy. The move also signals growing optimism among investors that Italy’s economy can sustain its recovery despite persistent global challenges.
Prime Minister Meloni welcomed the decision, describing it as a validation of her government’s efforts to strengthen the nation’s fiscal foundation. She highlighted that the upgrade demonstrates Italy’s ability to combine economic responsibility with social support measures. According to Meloni, the government’s approach to balancing public spending with investment in infrastructure, innovation, and employment has begun to yield tangible results.
The upgrade comes at a crucial time for Italy, as the country continues to navigate high debt levels and moderate growth. Italy’s public debt remains one of the largest in the eurozone, accounting for more than 135 percent of GDP. However, DBRS noted that effective fiscal policy, supported by European Union funds, is helping stabilize the outlook. The agency also pointed to Italy’s robust banking sector and resilient exports as key strengths.
Financial markets reacted positively to the announcement, with Italian government bond yields easing slightly and the spread between Italian and German bonds narrowing. The stronger credit rating is expected to reduce Italy’s borrowing costs, freeing up fiscal space for future investments and helping the government manage its debt more efficiently. Investors see the upgrade as a sign that Italy’s fiscal trajectory is moving in the right direction, even amid broader European economic uncertainty.
Economists view this upgrade as an endorsement of Meloni’s pragmatic economic policies. While her government initially faced skepticism from international markets due to its nationalist roots, Meloni has pursued a cautious fiscal path and maintained cooperative ties with European institutions. Her administration has focused on improving public spending efficiency, encouraging private investment, and accelerating projects tied to the European Union’s post-pandemic recovery fund.
DBRS also emphasized that Italy’s medium-term outlook will depend on its ability to sustain reforms and ensure effective use of EU recovery funds. Structural challenges such as low productivity, an aging population, and regional disparities remain pressing issues. Nonetheless, the government’s progress in improving administrative efficiency and promoting investment in digital and green sectors has been positively received.
The rating upgrade provides Meloni’s administration with a valuable political boost as it seeks to consolidate public support and maintain fiscal credibility. With this improvement, Italy joins the ranks of European nations showing resilience amid global economic pressures.
In conclusion, DBRS’s decision to raise Italy’s credit rating marks a major vote of confidence in the Meloni government’s economic strategy. It reflects both improved market sentiment and a broader recognition of Italy’s steady recovery. If Meloni continues to combine fiscal prudence with growth-oriented reforms, Italy may be on track to strengthen its position as one of Europe’s most stable and promising economies
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