ATHENS: Ratings agency Fitch on Friday revised Greece's creditworthiness outlook to negative from stable, saying political uncertainty may delay its return to bond markets and hurt its economy's recovery.
Fitch, Standard & Poor's and Moody's had all lifted Greece's rating last year as the economy showed tentative signs of getting back on its feet after six-years of recession.
But snap polls on Jan. 25, which opinion surveys show are likely to be won by the anti-bailout leftist Syriza party, have clouded the direction of future Greek policymaking, rendering the outlook uncertain.
Syriza has vowed to cancel austerity measures and renegotiate the country's debt obligations, raising fears of a standoff with European partners that could trigger a new financial crisis.
"Prolonged political deadlock until the summer is not Fitch's expectation, but would increase the risk of financing difficulties and a return to recession," the agency said, affirming Greece's 'B' rating.
The agency said that both the new Greek government and its EU/IMF lenders have strong incentives to find common ground but the gap between their policy proposals remains wide and a second round of elections could not be ruled out.
"Negotiations with the troika will exacerbate frictions between and within political parties and could cause a weak coalition to collapse. Alternatively, the initial formation of a coalition may prove impossible, as happened in 2012," it said.
Fitch also cut its growth forecast on Greece's economy this year by one percentage point to 1.5 percent, due to domestic policy uncertainty and a weaker growth outlook in the euro zone.
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