Scope revises Italy's outlook to 'positive'

European ratings agency Scope revised Italy's outlook to "positive" from "stable" on Friday, citing sustained improvement in public finances and stronger resilience of the country's economy.

Scope, which affirmed its credit ratings at "BBB+", said the economy's improved resilience reflects a stronger labour market, a sound banking system and a favourable net external position.

"Despite multiple shocks, including the energy crisis, weaker manufacturing activity in Europe and recent U.S. trade protectionism measures, Italy's economy is demonstrating notable resilience," the agency added.

Italy's 2024 budget deficit of 3.4% of gross domestic product was well inside the government's 3.8% target, and this month Giorgia Meloni's government said the 2025 deficit would respect the European Union's 3% ceiling for the first time since 2019, before the COVID-19 pandemic.

The euro zone's third-largest economy stagnated in the third quarter from the previous three months, data showed this week, after contracting by 0.1% between April and June.

However, Italy remains hampered by chronically weak growth, near-stagnant productivity and a public debt that is proportionally the second-highest in the euro zone after Greece.