S&P lowers Italy's credit rating

International credit rating agency Standard & Poor's lowered on Tuesday its unsolicited long-term sovereign credit ratings on Italy to 'BBB' from 'BBB+'. The outlook on the long-term rating of Italy was announced as negative, indicating the S&P's belief that there is at least a one-in-three chance that the rating could be lowered again in 2013 or 2014. At the same time, S&P expects 1.9 pct of contraction for the Italian economy in 2013. S&P noted in its statement that the rating action reflects the agency's view of a further worsening of Italy's economic prospects coming on top of a decade of real growth averaging minus 0.04%. "Italy's economic output in the first quarter of 2013 was 8% lower than in the last quarter of 2007 and continues to fall. We have, moreover, lowered our GDP growth forecast for 2013 to minus 1.9%, from minus 1.4% in March 2013 and positive 0.5% in December 2011. Our expectation is that 2013 per capita GDP will be an estimated €25,000 or US$33,000, which is somewhat below 2007 levels," said the S&P statement.