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VIRUS-ITALY-DEBT-RATING-FITCH
Fitch downgrades Italy rating to BBB-
ROME, April 29, 2020 (BSS/AFP) – Fitch said Tuesday it was downgrading Italy’s rating to BBB- due to the economic fallout from the coronavirus pandemic.
Italy is the European country most affected by COVID-19 and trails only the United States in the number of deaths.
The government has said it expects the country’s economic output to shrink by eight percent this year and has launched a host of stimulus measures.
“The downgrade reflects the significant impact of the global COVID-19 pandemic on Italy’s economy and the sovereign’s fiscal position,” the Fitch ratings agency said in a statement.
Italy’s finance ministry responded by saying that “the fundamentals of the Italian economy and public finances are solid.”
“The other rating agencies have adopted a more cautious attitude,” the ministry said in a statement.
On Friday S&P held Italy’s rating at BBB, but said its outlook was negative and its grade could be lowered if the government debt situation deteriorates.
Fitch said that after the downgrade, its ratings outlook for Italy was stable.
It also “forecasts an eight percent GDP contraction in 2020 and said the risks to this baseline forecast are tilted to the downside”.
Italy’s debt is expected to jump to 155.7 percent of GDP this year, against 135.2 percent before the outbreak began — and the 134.8 percent recorded in 2019.
BSS/AFP/MMA/1048HRS