The growth of the Italian economy "exceeded our expectations" in the first quarter, "rising sharply to 0.5% QoQ (previous March forecast -0.2%) due to the significant easing of the natural gas crisis in Europe, a strong rebound in tourism and strengthening global demand. In light of these dynamics, we have revised our forecast for 2023 to 1.2% from 0.5% previously."

This was announced by the rating agency Fitch which today confirmed Italy's rating at 'BBB' with a positive outlook. In 2024, Fitch notes, "we expect the economy to expand by 0.8%, slower than the 1.3% forecast in March, due to the base effect and tighter financing conditions".

The rating, explains Fitch, "is supported by a diversified economy with high added value, membership of the euro area, solid institutions and a GDP per capita that is more than double the average of countries similar to Italy". These credit characteristics are offset by weak macroeconomic and fiscal fundamentals, in particular very high government debt, a relatively accommodative fiscal stance after the pandemic, subdued economic growth potential and, more recently, a higher yield environment.

Fitch also forecasts a decline in Italian public debt, which in 2024 is expected to stand at 142.3% of GDP compared to 144.4% in 2022. However, debt remains above pre-pandemic levels, when it reached 2019.134% in 1.