The Standard & Poor’s rating agency confirmed the BBB+ rating for Italy with a stable outlook. A decision that reflects the perception of political stability and the improvement of public finances. According to the latest estimates from the Financial and Budget Planning Document (DPFP), the deficit will return to around 3% of GDP in 2025, a sign of more balanced management of the accounts. On the financial markets front, the spread between BTPs and German Bunds also remains limited. On the closing day, the differential stood at 81.7 basis points, slightly up compared to 80.5 the previous day, but still at levels considered stable. The yield of Italian bonds is decreasing, although the reduction was less marked than that recorded by German bonds. A trend that confirms the confidence of international investors in the solidity of Italian debt. After S&P’s confirmation, attention now shifts to Moody’s, which in May had maintained Italy’s rating at Baa3, one step above the “junk” threshold, however improving the outlook from stable to positive. The next review is scheduled for November 21st and will represent a key moment for the overall assessment of the country’s economic and financial sustainability.
Signs of weakness in the industrial sector
Despite the markets’ confidence, not all macroeconomic indicators show the same trend. The manufacturing sector continues to experience difficulties. According to Istat data, industrial production began to fall again in August, recording a decline of 2.4% compared to July and 2.7% on an annual basis. This is the third consecutive month of contraction in the last year, interrupted only by slight recoveries in April and July. The weakness in August, a month traditionally influenced by summer closures, reflects a broader trend. On average for the June-August period, industrial production decreased by 0.6% compared to the previous three months, signaling a stalemate in the production sector.
The growing and declining sectors
The analysis by sector shows a generalized slowdown. Consumer goods fell by 1.2% monthly and 2.3% annually, while the energy sector recorded a decline of 0.6% monthly and 8.6% annually. The most significant contraction concerns the supply of electricity, gas and steam, down by 13.5% compared to last year. Other sectors in difficulty include manufacturing industries related to the repair and installation of machinery (-6.4%) and the wood, paper and printing industry (-2.5%).
In contrast, some sectors show signs of growth. The production of pharmaceutical products marks an increase of 16.1% on an annual basis, while the manufacturing of transport equipment grows by 9.9%. The trend in the production of coke and petroleum derivatives was also positive, increasing by 7.1%. These sectors help to offset, at least in part, the general decline in Italian industry.
The reactions of the associations and the perspectives
Trade associations have expressed concern about the production trend. Confcommercio invites us not to underestimate the August data, while recognizing the seasonality of the month, and interprets it as a sign of the structural difficulties in relaunching growth. The CGIL speaks of an “unprecedented production crisis since the post-war period” and accuses the government of not having yet defined an effective industrial strategy. Codacons also defines the data as “a collapse”, underlining the risk that industrial weakness will be reflected in household consumption. The new US duties could also weigh on the prospects for 2025, which risk worsening the position of Italian exports, one of the main engines of the national economy.
