Fitch affirms Italy at ‘BBB’; outlook negative

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“Fitch Ratings has affirmed Italy’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘BBB’ with a Negative Outlook,” Fitch Ratings announced on Friday.

Key takeaways from the press release

  • Fitch forecasts GDP growth of 0.3% in 2019, down from 0.8% in 2018 (compared with the 1.2% we forecast for both years at our previous review in August), with investment growth falling to 0.4% from 3.8% last year. 
  • Fitch forecasts an increase in the general government deficit from 1.9% of GDP in 2018 to 2.3% this year, and 2.7% next, 0.1pp higher than at our previous review. 
  • There continues to be a relatively large degree of uncertainty over the fiscal forecast beyond 2019, linked to political dynamics. 
  • Policy tensions in the coalition government and the potential for early elections add to uncertainty over fiscal and economic policy.
  • Coalition differences and the current absence of a well-defined economic policy agenda in our view contribute to investor uncertainty but also reduce the likelihood of a more far-reaching reversal of structural reforms.
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