Italy boasts a large economy, high household wealth, low private sector debt and economic diversification, but on the other hand a weak growth potential and high levels of public debt.
It is the photograph of Moody's (whose rating on Italy is Baa3 with a negative outlook) and now observes that "the tighter financing conditions, high inflation, risks to energy supplies from Russia and a more complex political environment are weighing on Italy's growth prospects and debt dynamics ".
But according to Moody's "the central countries of the euro area will be inclined to support Italy in case of need, an opinion that was confirmed by the recent announcement of the ECB's anti-spread plan".
Moody's sees the risk that "the political environment hinders the implementation of structural reforms; that limited energy supplies weaken the economic outlook; and that fiscal strength weakens."
The right-wing coalition "should attempt to renegotiate some aspects of the NRP, this will likely delay its implementation, putting downward pressure on investment spending when high inflation and energy supply risks are already weighing on economic activity" reads in a report.
Moody's sees the risk that "the political environment hinders the implementation of structural reforms
; that limited energy supplies weaken the economic outlook; and that fiscal strength weakens."
The right-wing coalition "should attempt to renegotiate some aspects of the NRP, this will likely delay its implementation, putting downward pressure on investment spending when high inflation and energy supply risks are already weighing on economic activity" reads in a report.
Moody's, which after the elections did not change its opinion on Italy while awaiting the formation of a new government, updates its profile, analyzes the situation and possible developments.
Without reforms, the credit rating could be cut.
"We would probably downgrade Italy's ratings if we were to see a significant weakening of the country's medium-term growth prospects, due to the failure to implement growth-enhancing reforms, including those outlined in the NRP," the analysts write in a report. update.
