Moody's said that Italy's credit rating may be lowered amid the challenging economic conditions facing the third largest economy in the euro area. The Italian economy contracted 5.1% in 2009 and is expected to struggle this year to recover due to the high debt threatening the economy. Italy's debt is 1.8 trillion euros, yet it represents 5.3% of GDP which put Italy with the fifth largest debt in Europe. However, the deficit is predicted to incline to 117% of GDP in 2010 which will make the task of lowering the debt to the 3% ceiling set by the EU by 2012 as planned difficult. S&P and Fitch lowered the country's debt rating in 2006 while Moody's left the AA2 rating unchanged since 2002.