The Minister of Economy Bruno Le Maire and the entire government can breathe a new “phew” of relief. The most influential rating agency, Standard & Poor’s, maintained the French debt rating at AA, according to a press release published on Friday afternoon.
However, it gave this rating with a negative outlook due to “uncertainty” about “France’s public finances in a context of high budget deficits, although slowly falling, and high public debt.”
The agency’s experts, however, believe that there are still “significant risks that, if they materialize, could further reduce France’s budget flexibility”, citing, for example, “tighter financing conditions” or “greater fragmentation policy” that would complicate policy implementation.
Last June, S&P had already maintained its French credit rating at AA instead of lowering it one level, to AA-.
On the contrary, a few weeks earlier, his colleague Fitch had chosen to lower the rating of the French debt to “AA-” due to a political and social context marked by opposition to the pension reform and that would probably complicate the reduction of public expenses. However, during its last review in late October, Fitch maintained its rating on it for France.
Standard & Poor’s decision “is consistent with the government’s decisions on public finances,” Bruno Le Maire reacted on Friday afternoon on his X account (formerly Twitter). “More than ever, we remain determined to reduce public spending and accelerate the reduction of France’s debt. Our independence and respect for our national and European commitments are at stake.”
“I consider that the maintenance of France’s rating is a positive sign, which encourages us to maintain the course of our trajectory in terms of public finances,” reacted in a statement the deputy (renaissance) Jean-René Cazeneuve, rapporteur general budget.
Despite a 0.1% contraction in French economic activity in the third quarter, Bruno Le Maire still expects growth of 1% this year and 1.4% in 2024.
In a slow-moving European economic context, the consensus of economists for the croissance of France is 0.8% for 2024, and the rejoint mercredi for the OECD, which will increase 1.2% in September.
In June, S&P warned of “risks” for the execution of budgetary objectives and, therefore, for the ability to reduce a debt of more than 3 trillion euros, whose annual repayment will become the first item of State spending in 2027, facing 2027. of Education.
Source: BFM TV
