S&P downgrades Italy's credit rating

Tue Sep 20, 2011

The high-profile Standard & Poor's credit assessment agency (S&P) says it has lowered Italy's sovereign debt rating due to its fiscal and political problems.

S&P announced on Monday that it had cut down the Italian debt rating from "A+/A-1+" to "A/A-1" due to bleak economic prospects of the European country, AFP reported.

"We believe the reduced pace of Italy's economic activity to date will make the government's revised fiscal targets difficult to achieve," the agency said in a statement, adding that the country's fragile ruling coalition "limit the government's ability to respond decisively" to problems.

A diminished labor market, inefficient public services, and limited foreign investment in the country have been designated as the major hurdles to Italy's economic growth.

Another prominent credit assessment agency, Moody's Investors Service, has also suggested that it may reconsider Rome's credit rating which currently stands at Aa2, two notches below the agency's top triple-A rating.

According to data released by the Bank of Italy last week, the country's public debt climbed to 1.911 trillion euros ($2.6 trillion) in July, which is around double its GDP.

Rome has Europe's second-largest debt level, the cost of which has been rising in recent weeks and is likely to further soar in the wake of the downgrade.

Italy follows eurozone countries, Spain, Ireland, Greece, Portugal and Cyprus in having its credit rating reduced this year.

Source: PressTV.
Link: http://www.presstv.com/detail/200147.html.