NEW YORK/MILAN, March 8 Fitch Ratings on Friday
cut Italy's sovereign credit rating by one notch to BBB plus,
citing political uncertainty after the country's inconclusive
election and rising debt.
Fitch added in a statement that the outlook was negative.
"The inconclusive results of the Italian parliamentary
elections on February 24-25 make it unlikely that a stable new
government can be formed in the next few weeks," Fitch said.
"The increased political uncertainty and non-conducive
backdrop for further structural reform measures constitute a
further adverse shock to the real economy amidst the deep
The election produced a hung parliament, with a centre-left
coalition winning the lower house but falling short of control
of the Senate, which has equal legislative powers.
Recent data on the real economy shows the recession in Italy
is one of the deepest in Europe, the ratings agency said, adding
that it now sees Italian public debt peaking at close to 130
percent of gross domestic product at the end of this year.
That was a sharp upward revision from Fitch's previous
forecast of 125 percent made in the middle of last year.
Italy has been in recession since the middle of 2011 and is
not expected to post any growth until the second half of this
year at the earliest. GDP shrank 2.4 percent last year.
Standard & Poor's rates Italy BBB-plus and Moody's rates the
country Baa2. All those ratings carry negative outlooks.