Despite the country's political instability, the Standard and Poor's rating agency has decided to maintain France's credit rating.
In the midst of budgetary turmoil, the rating agency S&P Global Ratings maintained, on Friday, France's credit rating at AA- by combining it with a stable perspective.
“France remains a balanced, open, rich and diversified economy”justifies the agency in a note.
“Despite the current political instability, we expect France to comply – with some delay – to the budgetary framework of the European Union and gradually consolidates its public finances in the medium term.“
France is trying to reduce its public deficit
Antoine Armand, the Minister of the Economy, welcomed the rating agency's decision.
“By maintaining France's rating, Standard and Poor's demonstrates the credit granted to the government to reduce the deficit and restore our public finances.”
During its previous assessment, in May, the American rating agency lowered the French rating by one notch, from “AA” to “AA-”with a stable outlook.
In October, Moody's and Fitch did not modify their credit rating of France but also gave it a negative outlook, which implies the risk of a further downgrade of the rating in the medium term.
The three major rating agencies fear a slippage in public accounts, in a fragmented political landscape, with a government likely to fall on each budgetary text.
S&P Global Ratings warns, however, that the agency could lower France's credit rating “if the government is unable to reduce its large budget deficit or if economic growth falls short of our projections over an extended period.”
The executive led since September by Michel Barnier wants to reduce the public deficit to 6.1% of GDP in 2024 to “around” 5% in 2025 with a finance bill which provides for some 60 billion euros in spending cuts and tax increases.
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