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The S&P Ratings has recently announced that it maintained Italy’s sovereign rating at BBB and lowered its outlook to negative from stable.

Key quotes (via Reuters)

  • Outlook on Italy revised to negative on risks to economic growth following budget plan.
  • Negative outlook reflects risk that Italian government’s decision to further increase public borrowing will stifle incipient recovery of private sector.
  • Italian government’s economic, fiscal policy settings are weighing on its economic growth prospects.
  • Negative outlook reflects risk that government’s decision to further increase public borrowing will exacerbate Italy’s “weak” budgetary position.
  • A further rise in yield on Italian banks’ claims on the state might reduce the banks’ capacity to fund the Italian economy.
  • No longer expects Italy’s government debt to GDP to continue on a downward path.