- Overview • We have revised our average real and nominal GDP growth projections for Italy over the 2014-2017 forecast horizon down to 0.5% and 1.2%, respectively, from 1.0% and 1.9%, as persistently low inflation and a difficult business environment continue to weigh on Italy's economic prospects. • In our opinion, Italy's weak real and nominal economic prospects have undermined public debt dynamics more than we forecast in our June 6, 2014 report. In absolute terms, we now estimate Italian general government debt will be €2.256 trillion by year-end 2017, which is €80 billion higher (or 4.9% of estimated 2014 GDP) than we forecast in June. • Under our criteria, such a large increase in debt, combined with consistently low growth and eroded competitiveness, are not commensurate with a 'BBB' rating. • We are therefore lowering our long- and short-term sovereign credit ratings on Italy to 'BBB-/A-3' from 'BBB/A-2'. • The stable outlook reflects our expectation that the government will gradually implement comprehensive and potentially growth-enhancing structural and budgetary reforms, and that household balance sheets will remain strong enough to absorb further increases in public debt. We also assume the European Central Bank's monetary policy stance will continue to support a normalization of inflation in Italy and its key eurozone trading partners. - Sei Dee già Pulp

FT: Italy's rating cut by S&P in a blow to Renzi - The week is ending with a blow to Matteo Renzi, the reforming Italian prime minister. Italy's credit rating has been cut from 'bbb' to 'bbb-' by rating agency Standard & Poors in a move that leaves the eurozone's third-largest economy a notch above junk status. Mr Renzi, who took power earlier this year, is pushing through reform of Italian labour laws in an effort to cut an unemployment rate that is stuck at 12.6 per cent. The Italian economy is facing a nasty cocktail of high unemployment, ebbing demand from its European neighbours and weak domestic consumption, according to the rating agency. Italian trade unions have called a general strike for December 12 to protest the labour reforms which include measure to make it easier for firms to dismiss employees. While acknowledging Mr Renzi's reforming agenda, analysts at S&P 500 warned that the government's efforts could be thrown off course. We believe this could happen if the government encounters increased opposition from constituencies adversely affected by its policies, particularly given a backdrop of persistently low economic growth. Italy's economic will muster growth of just 0.2 per cent next year, according to the rating agency, down from an earlier prediction of 1.1 per cent. As a result, the Italian government's budget deficit will be 2.7 per cent of gross domestic product between 2014 and 2017, higher than its earlier forecast of 2.5 per cent. The downgrade by S&P comes a day after European Central Bank president Mario Draghi insisted he has the backing from colleagues to introduce fresh stimulus to lift bank lending and ward off the threat of deflation. --> http://www.ft.com/intl... - Sei Dee già Pulp