Standard & Poor’s affirms Italy’s BBB rating with a positive outlook. S&P states this.
S&P cut Italy’s growth estimate for 2022 to 3.1% from the initially expected 4.4%. “Italian growth is slowing,” says Standard & Poor’s, forecasting a 6.3% deficit this year.
“By the end of June, the Italian government hopes to have completed the justice, public procurement and competition reforms. S&P believes that these reforms will unlock next generation money flows from the EU worth more than 2% of GDP annually. Between 2022 and 2026, offsetting the risks Growth caused by the conflict between Russia and Ukraine,” states in a Standard & Poor’s note, a projection of “a general government budget deficit for 2022 equal to 6.3% of GDP, assuming that measures taken at the end of 2021 to mitigate the energy shock remain in place. At least until the end of this year.” “Rising energy prices have pushed inflation in Italy to its highest levels in the last 30 years, complicating the European Central Bank’s efforts to normalize monetary policy; higher inflation provides some financial benefits and is linked to S&P expectations of a sharp decline in debt-to-GDP year,” it continues. note. “These forecasts reflect the broad, pro-growth reforms implemented by the Italian authorities under the National Recovery and Resilience Plan (PNRR). These reforms aim to improve the Italian business environment and the effectiveness of the judicial system, reduce bureaucracy, increase labor participation and finance investments in renewable energy – In the longer term, the reforms – and funded under the PNRR – should mitigate risks to the Italian economy from the conflict between Russia and Ukraine (according to S&P’s baseline forecasts, the situation will not escalate to NATO members), Standard & Poor’s adds.
Standard & Poor’s affirmed Great Britain’s rating at “AA” with a positive outlook. This was stated by the rating agency, lowering its growth estimate to 3.5% for 2022 compared to the +4.4% forecast in December. Inflation is expected to stabilize at 6.3% this year, the highest level in 30 years.
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