Fitch downgrades Italy\'s rating to BBB+ after election deadlock

Fitch, one of the world\'s top-three credit rating agencies, said Friday it had downgraded Italy from \'A-\' to \'BBB+\' because of political instability and a worse-than-expected economic outlook, dpa reported. At BBB+, Italian sovereign debt still qualifies as \'investment grade,\' according to Fitch\'s credit rating scale. In a statement, it explained its decision by stating that Italy was less likely to adopt much-needed economic reforms following \'inconclusive\' general elections last week, in which the centre-left prevailed but failed to secure a parliamentary majority. Fitch noted also \'the risk of a more protracted and deeper recession than previously expected,\' predicting that gross domestic product (GDP) would shrink by 1.8 per cent this year, far more than the 1-per-cent fall forecast by the European Union last month.