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LONDON (Dow Jones) – Italy 's controversial fiscal policy in the face of rising debt has an effect: the Moody & Investors Service rating agency has downgraded the credit rating of the euro area in local and foreign currencies to "Baa2". The outlook has been adjusted to stable. Credit analysts said Italy had experienced a marked deterioration in its fiscal strength. They justified this by the goal of the Roman government to increase the budget deficit for years to come.
Meanwhile, another euro member is getting better: the rating agency Fitch Ratings has raised Cyprus' credit rating. The risk of long-term issuer default was rated BBB- earlier than BB +. The outlook is stable. Analysts expect the Mediterranean island to post a record 2.7% GDP surplus to GDP in 2018. In April, only 1.7% had been targeted.
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DJG / FLF
(END) Dow Jones Newswires
October 19, 2018 5:28 pm ET (9:28 pm GMT)
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