Fitch Downgrades Italy to BBB-

Fitch Ratings said it downgraded Italy's long-term foreign-currency issuer default rating to BBB- from BBB.

“The downgrade reflects the significant impact of the global Covid-19 pandemic on Italy's economy and the sovereign's fiscal position. Fitch forecasts an 8% GDP contraction in 2020 and the risks to this baseline forecast are tilted to the downside, as it assumes that the coronavirus can be contained in 2H20, leading to a relatively strong economic recovery in 2021,” Fitch said in a press release.

“In the event of a second wave of infections and the widespread resumption of lockdown measures, economic outturns would be weaker for 2020 and 2021,” the agency said.

The outlook is stable.

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