Fitch says new Georgia violence worrying

LONDON (Reuters) - Ratings agency Fitch said on Thursday that mounting violence between Georgian forces and South Ossetian separatists was worrying but not enough to threaten the country's sovereign credit rating.

But Head of Fitch's emerging European sovereigns Edward Parker said any outbreak of serious prolonged warfare could prompt the agency to downgrade Georgia from its current BB- rating with a stable outlook and impact foreign investment.

"Georgia has a very large current account deficit -- about 20 percent of GDP -- but that has been more than covered with foreign direct investment," Parker told Reuters in a telephone interview.

"What is happening at the moment is worrying and a return to conflict could affect their credit worthiness."

Georgia issued a debut $500 million Eurobond earlier in the year. Heavy fighting between Georgian forces and the separatists erupted on Thursday after nearly a week of clashes that have deepened fears of full-blown war.

(Reporting by Peter Apps; Editing by Victoria Main)