ROME - Fitch rating agency on Friday cut Italy's credit rating from A- to BBB+, with a negative outlook due to the "inconclusive result" of last month's national election.

According to Fitch, the Italian recession was one of the deepest in Europe. It forecast that the country's gross domestic product (GDP) in 2013 will contract 1.8 percent, while the debt-to-GDP ratio will rise to 130 percent.

"The increased political uncertainty and non-conducive backdrop for further structural reform measures constitute a further adverse shock to the real economy amidst the deep recession," it said.

Pier Luigi Bersani's favorite center-left coalition, despite coming first in the vote, failed to win a solid majority in the Senate after comedian-turned-politician Beppe Grillo's anti-establishment Five Star Movement benefited from a major protest vote.

The European Central Bank (ECB) President Mario Draghi on Thursday downplayed the effect of the inconclusive election, saying that many of the structural reforms started by Mario Monti's caretaker government were set on "auto pilot."