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S&P downgrades Italy's credit rating
Standard and Poor's on Tuesday downgraded its rating for Italy down to BBB from BBB+ with a negative outlook.
The U.S. rating agency said in a statement that the country's economic prospects were getting weaker and it could make another downgrade in 2013 or 2014.
According to forecast of Standard and Poor's, the Italian economy will contract by 1.9 percent this year with a debt-to-GDP ratio of 129 percent.
In its view, the Italian economy was stagnant because of rigidities in the labor and product markets.
"In our view, the low growth stems in large part from rigidities in Italy's labor and product markets," the agency's analysts wrote.
Italy's downgrade showed that "the situation remains complex" and the eurozone third largest economy was still a "special supervised," Prime Minister Enrico Letta was quoted as saying by ANSA news agency.
"The situation remains complex," he said pledging that his new coalition government will make every effort to stimulate the economy starting from revising a controversial property tax.
[Source: Xinhua, Rome, 09Jul13]
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