Dow Jones-the rating agency S&P has reduced the outlook for France to “negative” of “stable”. The rating AAA was confirmed. The gradation reflects the increasing public debt against the background of a weak political consensus to cope with the great structural budget deficits of France, compared to a background of uncertain economic growth prospects, the analysts say.
The rating could be reduced if the government fails to further reduce its large budget deficits in the next two years, or if economic growth remains under the forecasts of the analysts over a longer period of time. For example, if the French government significantly weakened the 2023 pension reforms, this could exert a downward pressure on the ratings by increasing the imbalances in the social security system, a key element in public finance.
In contrast, the rating could be raised if France’s budget deficit is reduced faster than predicts from the analysts and accelerates economic growth.
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DJG/Ros
(End) Dow Jones Newswires
February 28, 2025 16:42 ET (21:42 GMT)