Daily Management Review

S&P downgrades France's rating from ‘AA’ to ‘AA-’


France's long-term sovereign credit ratings in foreign and local currencies have been reduced from "AA" to "AA-" by S&P Global Ratings. The agency released a press release stating that the prognosis is "stable."

The short-term ratings of France remain at "A-1+."

The agency's researchers predicted that, "contrary to our previous expectations, we forecast France's public debt to increase to around 112% of GDP by 2027 from around 109% in 2023."

In 2023, the budget deficit of the nation was 5.5% of GDP, a figure that exceeded the forecast of 4.9% of GDP.

"While we expect that the recovery in economic growth and the recently implemented economic and budgetary reforms will allow France to reduce its budget deficit, we now forecast that it will remain above 3% of GDP in 2027," the agency stated.

The stable forecast, according to the agency's experts, reflects predictions that real economic development will quicken and bolster the government's fiscal consolidation efforts, but insufficiently to lower the already high ratio of government debt to GDP.

source: reuters.com