Italy: Outlook Italian insurance market improves

Fitch Ratings has revised Italy's Outlook to Stable from Negative. At the same time the agency has affirmed Italy's Long-term foreign and local currency Issuer Default Ratings (IDRs) at 'BBB+'. The issue ratings on Italy's senior unsecured foreign and local currency bonds were also affirmed at 'BBB+'. 

The Country Ceiling has been affirmed at 'AA+' and the Short-term foreign currency IDR at 'F2'.

Fitch has also  revised its outlook on the Italian insurance market from negative to stable following stronger-than-expected first-half results from Italian insurers.

The change also reflects Fitch's expectation that Italian insurers' profit and capital adequacy will be resilient despite the country dipping back into recession.

GGGD will peak at 135% of GDP in 2014, marginally higher than Fitch's previous forecast (133% of GDP), due to weaker nominal GDP growth. Fitch expects GGGD to decline slowly and remain above 130% of GDP until 2017, compared with the 'BBB' median of 40%. The high debt leaves very limited fiscal space to respond to any adverse shock.

The new government of Matteo Renzi announced a structural reform agenda with an ambitious timetable and confirmed in the 2014 Stability Programme the previous governments' commitment to the eurozone fiscal framework, in particular, keeping deficit below 3% of GDP in 2014 and maintaining the medium-term fiscal consolidation path.

Almere-Digest

Eurozone recovery still slow, but Germany and France doing better than expected

Europe's overall economy may be weak, but eurozone growth continues.

Indeed it was slightly stronger-than-expected in the bloc’s two biggest economies – Germany and France – in the final three months of last year.

Analysts said the growth was mainly driven by exports and investment.
German GDP expanded 0.4 percent from the previous quarter, France’s by 0.3 percent and Italy’s by 0.1 percent

The figures, from Eurostat, the EU’s statistics office, show 0.3 percent growth region-wide compared to the previous quarter.

Upwardly revised third quarter numbers meant France managed to avoid slipping back into recession and had growth of 0.3 percent for the whole of last year.

French company and public investment rose and household spending recovered. But the finance minister said faster growth was needed to create more jobs with unemployment at nearly 11 percent.

Italy, which is once again in political turmoil, dragged itself back to growth for the first time since mid-2011.

But the final quarter’s 0.1 percent expansion was not enough to keep GDP from contracting by 1.9 percent over the whole of 2013.

One positive sign is that – significantly – for the first time in almost three years, all of the six largest eurozone economies did manage quarterly expansions.

Read more: Eurozone recovery still slow, but Germany and France doing better than expected | euronews, economy