Fitch, one of the world's top-three credit rating agencies, said Friday it had downgraded Italy from 'A-' to 'BBB+'
because of political instability and a worse-than-expected economic
outlook, dpa reported.
At BBB+, Italian sovereign debt still qualifies as 'investment
grade,' according to Fitch's credit rating scale.
In a statement, it explained its decision by stating that Italy
was less likely to adopt much-needed economic reforms following
'inconclusive' general elections last week, in which the centre-left
prevailed but failed to secure a parliamentary majority.
Fitch noted also 'the risk of a more protracted and deeper
recession than previously expected,' predicting that gross domestic
product (GDP) would shrink by 1.8 per cent this year, far more than
the 1-per-cent fall forecast by the European Union last month.