Nov 17 (Reuters) - Moody's on Friday left Italy's sovereign debt rating at Baa3, one notch above junk, but upgraded the outlook to stable from negative, in an unexpected boost for Prime Minister Giorgia Meloni's government.
Most analysts had expected the agency to leave both Italy's rating and outlook unchanged.
Moody's had put the euro zone's third-largest economy on a negative outlook in August last year following a government collapse and in the midst of an energy crisis.
"The decision to change the outlook to stable from negative reflects a stabilisation of prospects for the country's economic strength, the health of its banking sector and the government's debt dynamics," Moody's said.
The European Commission forecast on Wednesday that Italy's debt, proportionally the second-highest in the euro zone, would rise marginally from a projected 140% of national output this year to 141% in 2025.
Persons:
Giorgia, Moody's, DBRS, Fitch, Giancarlo Giorgetti, Gavin Jones, Keith Weir, Shounak Dasgupta, Rosalba O'Brien
Organizations:
P, Economy, Analysts, Saikeerthi, Thomson
Locations:
Italy, Germany, Bengaluru