December 5, 2014 / 6:35 PM / 4 years ago

S&P cuts Italy sovereign rating to BBB-, just above junk

ROME, Dec 5 (Reuters) - Standard & Poors on Friday cut Italy’s sovereign credit rating from BBB to BBB-, just one notch above junk, citing the country’s weak growth and poor competitiveness which undermine the sustainability of its huge public debt.

The downgrade is a blow for Prime Minister Matteo Renzi, who came to office in February pledging an ambitious reform agenda to lift Italy out of recession, but has seen the economy continue to shrink.

S&P forecast that Italian real economic growth would be just 0.2 percent in 2015, and growth would average 0.5 percent in the 2014-2017 period. It said its new BBB- rating carried a stable outlook, reflecting its expectation that Rome would enact growth-enhancing structural and budgetary reforms. (Reporting By Gavin Jones; editing by Steve Scherer)

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