...Eurozone Deflation Risk Increasing: Fitch Ratings' sovereign group recently published a report highlighting the growing deflationary pressures in the eurozone. While Fitch's base case is that the eurozone will not experience protracted deflation but several years of sub-target inflation, deflation is still considered a significant risk, especially in southern Europe. Japan-Style Zero Inflation Scenario: This report analyses the impact of a protracted Japan- style deflation scenario on continental European toll road networks. The scenario assumes 0% inflation and 0.5% traffic growth over 15 years. No Severe Rating Impact: If such a `What-If' scenario were to become Fitch's Rating Case (FRC), ratings are not expected to be severely impacted, with downgrades of usually not more than one notch. Overall, the expected rating impact is limited as FRCs already incorporate sluggish traffic growth and muted inflation assumptions. Toll Roads at Risk: Many infrastructure assets have their price-setting...
