LONDON, July 29 (MNI) – Standard & Poor’s said today that Italy’s
fiscal consolidation plan will lend support to its credit ratings.
A full text of the S&P press statement follows:
“Standard & Poor’s Ratings Services said today that the sovereign
credit ratings on the Republic of Italy (A+/Stable/A-1+) are supported
by today’s decision by the lower house of parliament to approve a 25
billion (1.6% of GDP) fiscal consolidation package for the 2011-2012
period.
“The package focuses on a sharp reduction in spending by local and
regional governments, alongside a public sector pay freeze, pay cuts for
high earning public sector employees, and measures to reduce tax
avoidance. Our forecasts assume full implementation of the government’s
fiscal consolidation program.
“Official forecasts suggest that the general deficit will decline
by 2.6 percentage points of GDP by 2012 from 5.3% of GDP in 2009. On the
basis of these expected positive developments, we expect Italy’s
already-high general government debt burden to stabilize at about 120%
of GDP in 2011, followed by modest declines thereafter. If consolidation
efforts are delayed or hampered by fiscal slippage, the long- and
short-term sovereign ratings could come under downward pressure”.
–London Bureau; Tel: +442078627492; email: ukeditorial@marketnews.com
[TOPICS: MGX$$$,MFX$$$,MFXBO$]
