By Alessia Pe

MILAN (Reuters) -Moody’s review of Italy on Friday may yield the first rating upgrade for almost a quarter of a century, analysts say, reflecting growing confidence in the public finances of the euro zone’s third largest economy.

The agency lifted Italy’s outlook in May this year to positive from stable while keeping the rating at ‘Baa3’, the lowest rung of investment grade, citing a stronger-than-expected fiscal performance and a steadier political backdrop.

Since then Giorgia Meloni’s government has cut its 2025 budget deficit goal to 3% of gross domestic product, respecting the European Union’s limit a year ahead of schedule helped by stronger tax revenues and lower debt servicing costs.

RATING UNCHANGED SINCE 2018

“Italy’s fiscal outturns keep surprising positively,

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