March 10, 2020 / 2:33 PM / a month ago

S&P Global: Risk to Italy rating only if coronavirus hits long-term growth

LONDON (Reuters) - A senior official at S&P Global said on Tuesday that Italy’s sovereign credit rating would only be at risk if the coronavirus outbreak hurt the country’s long-term growth potential.

Italy’s government extended quarantine measures across the entire country on Monday in a bid to slow Europe’s worst outbreak of the coronavirus. Its economy is at risk of tipping into a recession as the lockdown hampers activity.

“The big question of course is, is this a single growth shock or does it really lower Italy’s long-term potential growth rate? If the latter is the case, then there is a risk to the rating,” said Frank Gill, S&P Global’s director of sovereign ratings for EMEA during a call.

S&P rates Italy at BBB, the second-lowest investment grade. The outlook on the rating is negative.

Reporting by Karin Strohecker; Writing by Dhara Ranasinghe

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