In the G7 (still don't regard Russia as an economic power), Japan and Italy have AA2 ratings while the rest of the crew have a AAA debt rating.
Italy is often associated with the PIGS but as I've mentioned elsewhere, it's a little misleading. Unlike those nations, it maintains a high grade rating because it possesses an advanced, developed and strong manufacturing and industrial base. Some of the world's greatest and most important brand names, companies and influence comes out of Italy.
It also accords Italy a higher GDP, stronger revenues and cash flow as a main international issuer of debt when compared to the PIGS. In other words, Italy has cash from other sources other than tourism - and it has that too in abundance. All reflected in the grade.
Bah. Italy so skeptical and cyncial, delicate and intricate of political and economic entities I consider it an accomplishment to be rated as such.
No one seems to be too concerned with Japan's AA2 rating. I wouldn't for the same reasons I mentioned about Italy. In addition, Japan remains a creditor nation.
China, ironically, is is rated lower than the United States at AA.
Italy's main economic problem (politics and social are different matters) has always been labour sclerosis and growth as this article in Moody's explains:
"Moody's placed Italy's Aa2 rating on review for downgrade, saying structural weaknesses such as a rigid labor market pose a challenge to growth. It also highlighted concerns about funding conditions of countries with high debt levels.
"Italy has had structural impediments to growth for some time. However, today, these challenges coexist with a scenario of rising interest rates and fragile market sentiment," Moody's analyst Alexander Kockerbeck told Reuters in an interview."
Big difference from the case we see with Greece or even likely Spain.
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