{"id":39404,"date":"2018-10-19T16:37:31","date_gmt":"2018-10-19T21:37:31","guid":{"rendered":"http:\/\/olduvai.ca\/?p=39404"},"modified":"2018-10-19T16:37:31","modified_gmt":"2018-10-19T21:37:31","slug":"moodys-cuts-italys-debt-rating-to-one-notch-above-junk","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=39404","title":{"rendered":"Moody&#8217;s Cuts Italy&#8217;s Debt Rating To One Notch Above Junk"},"content":{"rendered":"<div id=\"block-zerohedge-page-title\" class=\"block block-core block-page-title-block\">\n<h3 class=\"page-title\"><a href=\"https:\/\/www.zerohedge.com\/news\/2018-10-19\/moodys-cuts-italys-debt-rating-one-notch-above-junk\"><span class=\"field field--name-title field--type-string field--label-hidden\">Moody&#8217;s Cuts Italy&#8217;s Debt Rating To One Notch Above Junk<\/span><\/a><\/h3>\n<\/div>\n<div id=\"block-zerohedge-content\" class=\"block block-system block-system-main-block\">\n<article class=\"node node--type-article node--view-mode-full\" role=\"article\" data-gtm-vis-recent-on-screen-2077925_22=\"1342\" data-gtm-vis-first-on-screen-2077925_22=\"1342\" data-gtm-vis-total-visible-time-2077925_22=\"100\" data-gtm-vis-has-fired-2077925_22=\"1\">\n<footer class=\"node__meta\">\n<div class=\"submission-wrapper\"><a href=\"https:\/\/www.zerohedge.com\/news\/2018-05-25\/moodys-puts-italy-downgrade-review-junk-rating-possible\">Five months after putting Italy on downgrade watch,<\/a> Moody&#8217;s has seen enough and <strong>cut Italy&#8217;s debt rating to Baa3 &#8211; one notch above junk status<\/strong>.<\/div>\n<\/footer>\n<div class=\"node__content\">\n<div class=\"clearfix text-formatted field field--name-body field--type-text-with-summary field--label-hidden field__item\">\n<p><a href=\"https:\/\/www.zerohedge.com\/sites\/default\/files\/inline-images\/w62RQFBjjf-2_1.png?itok=lHM3392v\" data-image-external-href=\"\" data-image-href=\"\/sites\/default\/files\/inline-images\/w62RQFBjjf-2_1.png?itok=lHM3392v\" data-link-option=\"0\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.zerohedge.com\/sites\/default\/files\/inline-images\/w62RQFBjjf-2_1.png\" srcset=\"https:\/\/www.zerohedge.com\/sites\/default\/files\/styles\/inline_image_desktop\/public\/inline-images\/w62RQFBjjf-2_1.png?itok=lHM3392v 1x\" alt=\"\" width=\"500\" height=\"417\" data-entity-type=\"file\" data-entity-uuid=\"6b3e5603-6de3-4aa9-9751-cc7bc736e7b8\" data-responsive-image-style=\"inline_images\" \/><\/a><\/p>\n<p><strong>Moody&#8217;s Investors Service has today downgraded the Government of Italy&#8217;s local and foreign-currency issuer ratings to Baa3 from Baa2.<\/strong> The outlook on the rating has been changed to stable, meaning that any downgrade to junk &#8211; the worst case scenario &#8211; has been taken off the table for the time being.<\/p>\n<p>Moody&#8217;s also downgraded to Baa3 from Baa2 the local and foreign-currency senior unsecured bond ratings. The foreign-currency senior unsecured shelf and MTN ratings were downgraded to (P)Baa3 from (P)Baa2. Italy&#8217;s local-currency commercial paper rating and foreign-currency other short-term rating were downgraded to P-3\/(P)P-3 from P-2\/(P)P-2. The rating outlook is stable.<br \/>\nThe key drivers for today&#8217;s downgrade of Italy&#8217;s ratings to Baa3 are as follows:<\/p>\n<blockquote><p>1. <strong>A material weakening in Italy&#8217;s fiscal strength, with the government targeting higher budget deficits for the coming years than Moody&#8217;s previously assumed.<\/strong> Italy&#8217;s public debt ratio will likely stabilize close to the current 130% of GDP in the coming years, rather than start trending down as previously expected by Moody&#8217;s. Moreover, the public debt trend is vulnerable to weaker economic growth prospects, which would see the public debt ratio rise further from its already elevated level.<\/p>\n<p>2. <strong>The negative implications for medium-term growth of the stalling of plans for structural economic and fiscal reforms.<\/strong> In Moody&#8217;s view, the government&#8217;s fiscal and economic policy plans do not comprise a coherent agenda of reforms that will address Italy&#8217;s sub-par growth performance on a sustained basis. Following a temporary lift to growth due to the expansionary fiscal policy, the rating agency expects growth to fall back to its trend rate of around 1%. Even in the near term, Moody&#8217;s believes that the fiscal stimulus will provide a more limited boost to growth than the government assumes.<\/p><\/blockquote>\n<p>\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Moody&#8217;s Cuts Italy&#8217;s Debt Rating To One Notch Above Junk Five months after putting Italy on downgrade watch, Moody&#8217;s has seen enough and cut Italy&#8217;s debt rating to Baa3 &#8211; one notch above junk status. Moody&#8217;s Investors Service has today downgraded the Government of Italy&#8217;s local and foreign-currency issuer ratings to Baa3 from Baa2. The [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[195,380,1464,541,21050,7530,4318],"class_list":["post-39404","post","type-post","status-publish","format-standard","hentry","category-economics","tag-debt","tag-government-debt","tag-italy","tag-moodys","tag-moodys-investors-service","tag-ratings","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/39404","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=39404"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/39404\/revisions"}],"predecessor-version":[{"id":39405,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/39404\/revisions\/39405"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=39404"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=39404"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=39404"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}