Ratings agency Fitch has cut Italy’s credit rating from BBB to BBB- , just one notch above its junk rating, citing the disastrous effect of the Covid-19 crisis on the country’s economy.

Fitch’s unscheduled update on Italy’s creditworthiness is likely to further increase doubts about the sustainability of Rome’s borrowings. Italy’s economy is expected to contract by 8% this year with the public debt climbing by around 20 percentage points to 156% of gross domestic product.

Meanwhile the lockdown easing measures announced by Prime Minister Giuseppe Conte at the weekend have been received by the Italians with mixed feelings. Most restrictions to movement will stay and only a few production activities will resume when phase two kicks in on May 4.

Businesses such as bars, restaurants and barbers will have to wait almost one more month, until June 1 to open. The government’s decision has made many unhappy fuelling fears that some activities won’t be able to reopen at all.

The government says it has not authorized an immediate reopening of shops and markets. It explained that the scientific community has advised against such a move as there’s a high risk of another wave of coronavirus infections unless the health guidelines are observed in phase two of the emergency.

Italy is in its seventh week into the coronavirus crisis and has seen more than 27,000 COVID-19 deaths, second only to the United States.