S&P Global Ratings The rating of Italy at BBB, with a Negative Outlook. The credit rating agency, just like it did with Spain a few weeks ago, it has not cut the rating or changed the perspective, waiting to see how the coronavirus crisis evolves.
To mitigate the economic consequences of the public health emergency, the Italian authorities have launched budget stimulus measures worth 1.5% of GDP and have provided guarantees for small and medium-sized enterprises (SMEs) and exporters worth 25% of GDP, explains S&P.
These measures, together with the pre-existing automatic stabilizers, will push the Italy's public deficit up to 6.3% of GDP this year, and will increase public debt to about 153% of GDP by the end of 2020, according to their projections.
The agency highlights as positive that the ECB is supporting this additional public borrowing after launching its asset purchase program, which together represents more than 9% of the eurozone's GDP. The monetary organization launched in March a new asset purchase program for 750,000 million euros to try to ease financial tensions in the eurozone.
The new program was named Pandemic Emergency Purchase Program (PEPP), a Pandemic Emergency Purchase Program, and has served to relax the growing stress on risk premiums of the most affected countries, such as Italy and Spain.
S&P highlights as Italy's credit strengths its rich and diversified economy, its position of net external creditor and the lowest levels of private debt in the G7, which partially compensates for the impact of the large public deficit on its solvency.
The agency explains that only consider lowering the rating if he deficit it is not on a clearly downward path "in the next three years or if there is a marked deterioration in loan conditions that jeopardize the sustainability of public finances, including, for example, due to insufficient support measures at the eurozone level"
Furthermore, the agency has remained unchanged the AA rating of UK, with a stable perspective. On the other hand, has revised downward, up to Stable from Positive, the rating perspective BBB of Portugal; and downgraded to Stable from Positive the perspective of Portugal BB rating.
. (tagsToTranslate) maintains (t) rating (t) Italy (t) BBB (t) Outlook (t) Negative (t) Category: All (t) Category: Market Report (t) Category: Europe Report (t) Category: International News (t) Category: Pulses (t) Category: Pulses Europe (t) Category: Market Pulse