Italy secured a BBB+/A-2 sovereign credit rating confirmation with a positive outlook from S&P Global Ratings on November 13, avoiding a promotion to the single-A tier while maintaining its reliable borrower status amid persistent geopolitical and fiscal pressures.
Assessing Sovereign Credit Stability
- Standard & Poor’s maintained the long-term foreign and local currency ratings at BBB+ and short-term at A-2, citing a resilient private sector and structural current account surpluses.
- Milano Finanza noted the 10-year BTP yield traded at 4.38% with the BTP-Bund spread closing at 107 basis points ahead of the rating announcement.
- An earlier review on January 30 had confirmed the BBB+ rating while raising the outlook from stable to positive, rewarding fiscal resilience and the prospect of a gradual reduction in Italy’s public debt exceeding 3,200 billion euros.
Sovereign Rating and Outlook Confirmed
Italy retains its credit standing with international agency Standard & Poor’s, though it falls short of the promotion that would return national public debt to the A band, ANSA reported. The agency confirmed the BBB+ rating on long-term public debt and A-2 on short-term debt, keeping the outlook positive to suggest a possible score improvement in coming months.
“Bene l’outlook positivo da parte di S&P, è un’ulteriore conferma che siamo sulla strada giusta. In tempi così difficili una conferma rappresenta un successo,” said Giancarlo Giorgetti, Minister of Economy, told la Repubblica.
Ahead of the rating verdict, the BTP-Bund spread closed higher at 107 basis points on November 12, with the 10-year BTP yield rising to 4.38% and the 2-year yield easing to 4.51%, according to Milano Finanza. The Treasury successfully placed 7.25 billion euros across three bond issues with yields hitting lows not seen since September.
S&P Expects Italy to Improve Its External Position
S&P based its positive outlook on expectations that Italy will gradually improve its external position through structural current account surpluses persisting since the 2013 debt crisis. Il Sole 24 ORE reported that the agency expects Italy’s narrow net external debt to drop below 150% of current account receipts by 2028.
Economic Indicator 2026 Figure / Projection Target Timeline / Context Long-Term Sovereign Rating BBB+ / A-2 Confirmed by S&P 10-Year BTP Yield 4.38% Recorded at market close on November 12 BTP-Bund Spread 107 basis points Recorded at market close on November 12 Narrow Net External Debt Below 150% of current account receipts Projected by S&P by 2028.
Rising Expenditures Push Italy's 2027 Public Deficit Higher
The agency projects that rising expenditures for energy, defense, and interest payments will push Italy’s 2027 public deficit above prior estimates, though consolidation is expected to bring the deficit below 3% of GDP in 2026. La Repubblica noted that analysts factored in political difficulties surrounding the 2027 general elections and the management of public debt in the near term.
“Potremmo prendere in considerazione un abbassamento dei rating qualora le condizioni economiche, finanziarie esterne o di bilancio dell’Italia peggiorassero in misura significativa rispetto alle nostre previsioni,” S&P stated, according to la Repubblica.
Conversely, the agency outlined scenarios for a future upgrade if Italy reduces its public debt-to-GDP ratio or strengthens its external financial position against trade shocks. Milano Finanza reported that market participants anticipate S&P might wait for the country’s exit from the excessive deficit procedure and the 2027 election results before altering the sovereign grade.
