The clearest verdict on Giorgia Meloni's economic management sits in a number most Italians never look at, the spread between Italian and German government bond yields. When Meloni took office in September 2022, that spread stood at 251 basis points, a measure of how much extra investors demanded to hold Italian debt over Germany's. By January 2026 it had fallen to 59 points, a gap narrow enough to suggest markets no longer see Italy as the standout risk it once was within the eurozone.
That confidence has not been unshakeable. Italian borrowing costs have moved with the same global shocks that hit every sovereign bond market this year, including the sell off tied to the US Iran war and renewed inflation fears, and yields have risen off their lows as a result. But even after those moves, Italian yields remain well below where they sat before Meloni's government began, a track record investment manager Lauren Hyslop summed up by noting that the surprise of Meloni's premiership has been that she has largely governed as a fiscal pragmatist rather than a populist.
Moody's verdict points the same direction without going all the way. The agency kept Italy at Baa3, the lowest rung of investment grade, but raised its outlook to stable, a signal that the trajectory of Italy's economic strength, its banking sector and its debt dynamics has stopped looking like a source of downside risk, even if it has not yet earned an upgrade.
Underneath the improved market sentiment sits a debt figure moving the other way. Italy's debt to GDP ratio reversed its downward path in 2024 and stood at 137,1 percent in 2025, with forecasts putting it at 138,5 percent this year. Markets appear willing, for now, to treat political stability and fiscal discipline as reasons to look past a debt load still among the highest in the eurozone. Whether that patience survives contact with actual structural reform, the thing former Italian leaders say must follow Meloni's record breaking tenure, is the question the bond market has not yet had to answer.