The rating agency S&P Global did not lower France’s credit rating on Friday, maintaining it at the ‘AA’ level. She noted that the budgetary situation should improve, in particular thanks to the pension reforms of Emmanuel Macron’s government.
“This is largely due to a review of the government’s fiscal consolidation strategy,” the ratings agency wrote, citing pension reform and plans to remove energy subsidies citing lower prices hydrocarbons as a positive fact.
But five weeks ago another agency, Fitch, downgraded France’s credit rating by one notch, sparking protests from a government that had promised to wipe out the country’s debt.
AA ratings are one of the highest rating categories and represent strong capacity to service debt. In Europe, Germany and the Netherlands are among the highest-rated countries, at “AAA” level, which France lost in 2012. French Economy Minister Bruno Le Maire told the newspaper on Sunday. “I take note of the decision of the agency Standard & Poor’s to leave unchanged the rating of the French debt”, reacted the French Minister of the Economy, Bruno Le Maire, with the Sunday newspaper. “It’s a positive signal. Our public finance strategy is clear. It’s ambitious. And it’s credible.”
S&P, however, maintained a “negative” outlook for France in its statement, which means that the country is not immune to a downgrade. The agency said public debt would remain above 110% of GDP from 2023 to 2026 and the budget deficit would “persist, albeit declining”.
In 2022, the debt was 111.6% of GDP, but the government is aiming for 108% in 2027. France is the most indebted of the countries in category AA.
After reaching 4.7% in 2022, the French public deficit should rise slightly this year to 4.9% before gradually declining from 2024, anticipates the government in its stability program published in recent weeks, which is counting on a return to the European budgetary nails, i.e. below 3%, in 2027.
ABC Bourse with AFP
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