Fitch downgrades Italy to BBB plus
8 March 2013, by William L. Watts - Frankfurt (MarketWatch)


Fitch Ratings on Friday cut Italy's sovereign credit rating to BBB plus from A minus, citing the inconclusive outcome of last month's parliamentary elections and a deeper recession.

The outlook on Italy's rating is negative, the firm said, which means the country could see another downgrade.

With Italian politicians scrambling to form a government, "increased political uncertainty and [a] non-conducive backdrop for further structural reform measures constitute a further adverse shock to the real economy amidst the deep recession," Fitch said, in a news release.

Meanwhile, data indicate the country's recession may be deeper and more protracted than previously expected, Fitch said, causing Italy's debt to peak in 2013 at close to 130% of GDP.

Fitch previously forecast a peak of 125% in mid-2012.