Ratings agency Moody’s on Friday confirmed its sovereign debt rating for France, as well as the “stable” outlook associated with it, affirming its confidence in the country’s economy while competitor S&P was more pessimistic.
In a press release, Moody’s thus maintained its “Aa2” rating, which according to the agency reflects the advantages of a “rich and diversified economy, with a more favorable demographic profile than many other developed countries, as well as a good ability to honor the maturities of its debt, despite the high indebtedness”. Regarding maintaining a stable outlook, it indicates that the risks that weigh on the country’s issuer profile are currently measured, according to the rating agency.
France “continues to reap the benefits of structural economic reforms, particularly of the labor market, carried out in recent years,” argues Moody’s. Thus, the government wants to make a “pension reform that can tackle the problem of underemployment of the elderly.”
S&P does not rule out lowering the rating of French debt
However, the pace of France’s deficit reduction is expected to be “slower than most of its peers in Europe” and the country is likely to miss its annual public deficit targets, with debt that could reach 116% of GDP in 2026, anticipates Moody’s. .
Even debt stabilization appears to be out of reach given the economic shock facing Europe now, and in the worst case, debt could skyrocket to around 130% of GDP by the end of 2026.
S&P Ratings this Friday maintained France’s debt rating at “AA/A-1+” but did not rule out lowering it (perspective changed to “negative”) due to the slowdown in its economy and the deterioration of its public finances, linked to the aid paid to households and businesses to offset rising energy prices.
Source: BFM TV
