Credit rating agency S&P Global did not lower France’s credit rating on Friday, keeping it unchanged at the AA level, citing an expected improvement in the fiscal situation thanks in particular to the pension reform of Emmanuel Macron’s government.
“ This is mainly due to the revision of the government’s fiscal consolidation strategy writes the rating agency, citing as positive facts, in addition to the pension reform, the scheduled end of energy aid thanks to the fall in hydrocarbon prices.
Five weeks ago, another agency, Fitch, on the contrary lowered France’s rating by one notch, triggering protests from the government, which has vowed to straighten the nation’s accounts. The AA rating is among the highest rating categories, signifying a strong ability to repay debts. In Europe, Germany and the Netherlands are among the highest rated countries, with the AAA level, which France lost in 2012.
“ The difference between Fitch’s downgrade a month ago and Standard & Poor’s maintaining its rating is that there is an overweighting of the reform aspect of economic policies, in particular concerning unemployment insurance, pension reform, tax reduction taxation for the public deficit trajectory 2023-2027analysis on RFI Pascal de Lima, chief economist of the Canadian firm CGI Business Consulting. It’s rather a surprise, after all, there is still a reality, it’s that even Fitch’s rating is a very high rating. The difference is therefore not very significant. »
“ I take note of the decision of the agency Standard & Poor’s to leave unchanged the rating of the French debt “, reacted the French Minister of the Economy, Bruno Le Maire, to the Sunday newspaper (JDD). “ It is a positive signal. Our public finance strategy is clear. She is ambitious. And she is believable. »
A “negative” outlook
In its note, S&P nevertheless maintains its outlook “ negative on France, which means that the country is not immune to a lowering. The agency notes that the public debt will remain above 110% of GDP in the period 2023-2026, “ with a persistent, albeit declining, budget deficit “. Debt was at 111.6% of GDP in 2022, and the government is aiming for 108% in 2027. France has the highest debt of countries in the AA category.
After reaching 4.7% in 2022, the French public deficit should rise slightly this year to 4.9% before gradually declining from 2024, anticipates the government in its stability program published in recent weeks, which is counting on a return to the European budgetary nails, i.e. below 3%, in 2027.
(With AFP)