Italy is just two days away from a possible opportunity to begin shedding the near-junk credit status that has loomed over Giorgia Meloni’s time in office.

Prime Minister Meloni and her team are awaiting a potential decision from Moody’s Ratings on Friday. The agency placed Italy on a negative outlook in August 2022, keeping it at the lowest tier of investment grade, a move that clouded the election win she secured shortly afterwards.

That threat was removed the following year, but Moody’s still stands out as the only major credit agency assigning such a low rating.

While anticipation runs high in Rome ahead of this week’s decision, officials remain quietly optimistic that Italy is steadily moving toward a credit upgrade, either from Moody’s now or from other agencies in the near future, according to sources familiar with the situation, Bloomberg reports.

A spokesperson for the finance ministry stated that Italy’s figures speak for themselves, adding that officials will stay focused on their work and await Friday’s outcome.

Beyond serving as validation for Meloni’s efforts to reverse the country’s fortunes, any move by Moody’s toward a positive outlook, or even an upgrade, would carry added symbolic weight, coming just a week after the agency became the last major rater to downgrade the US from its top credit rating, which triggered a rise in Treasury yields.

Any such improvement would represent a meaningful milestone for a premiership that has already surpassed that of her predecessor, bringing with it a degree of political stability rarely seen in Italy. It also coincides with a symbolic moment: this week, Meloni reaches the theoretical halfway point of a five-year term, should she serve its full constitutional duration.

Meloni and her team have accomplished this while accelerating efforts to rein in Italy’s oversized public finances, with the budget deficit now projected to drop below the European Union’s 3% threshold as early as next year.

Furthermore, the yield spread between Italy’s 10-year bonds and their German counterparts, a key indicator of perceived risk in the eurozone, hovered around 100 basis points this week, significantly lower than the peak of over double that level seen shortly after Meloni’s 2022 election victory.

Credit rating agencies have also shown their approval. S&P Global Ratings delivered a surprise upgrade last month, lifting Italy to two notches above junk status. Fitch Ratings appears inclined toward a potential upgrade from the same level.

DBRS Morningstar and Scope Ratings currently rate Italy three levels above junk, with Scope also expected to issue a possible update this Friday.

Moody’s, however, still holds the lowest rating among the major agencies with a Baa3, just one step above junk, a grade that is increasingly seen as trailing behind its peers.