Fitch downgrades Italy to BBB+, outlook negative

Fitch Ratings decided to downgraded Italy's rating to 'BBB+' from 'A-', citing the inconclusive results of the Italian parliamentary elections and deeper recession as the main reasons. Fitch also kept negative outlook on the country, meaning Italy could see another downgrade.

"The inconclusive results of the Italian parliamentary elections on 24-25 February make it unlikely that a stable new government can be formed in the next few weeks", said Fitch. "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 recession".

Fitch also said that the ongoing recession in Italy is one of the deepest in Europe as confirmed by Q412 data.