Milan: Fitch on Friday warned political deadlock in Italy following elections this week in which no party won an overall majority added downward pressure on its sovereign credit rating.
“It has the potential to disrupt policy making and reduce policy continuity, and to weigh further on an already weakening economy,” Fitch Ratings said in a statement.
“The prospect of a lengthy period of political instability following Italian parliamentary elections adds to the pressure on the country’s sovereign rating,” it said.
Fitch scores Italy with an A- rating and a negative outlook.
“If a weak government emerges, it will be less able to respond to economic shocks,” it said.
A centre-left coalition won the most votes in elections failed this week but not enough to form a majority in parliament.
No possible majority coalition has emerged and many analysts warn Italy will have to hold new elections within a few months at the latest.
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