Moody’s does not change France’s rating – L’Express

In the midst of studying the 2024 budget in Parliament, this decision “testifies to the credibility of the sovereign signature”, noted the Minister of the Economy Bruno Le Maire, in a statement sent to AFP. “It reinforces our desire to continue France’s debt reduction and to respect the trajectory defined by the President of the Republic, and materialized by the public finance programming law,” he added. Moody’s specifies for its part that its press release does not “constitute a publication of a formal rating decision”.

Moody’s is the first of the three main rating agencies to have looked at the French rating again this year, before Fitch on October 27 and Standard & Poor’s (S&P) on December 1. In April, Fitch lowered France’s credit rating by one notch to “AA-” (also a rating that remains very high), with a “stable” outlook, which was seen as a blow. of warning.

Fitch had notably mentioned “significant budgetary deficits and modest progress” regarding their reduction, after three years of abundant public spending intended to cushion the shock of Covid and inflation, and social tensions around pension reform.

A few weeks later, France narrowly escaped a downward revision of the “AA” rating (the third best) awarded by S&P, considered the most influential of the three rating agencies. But S&P also hadn’t touched the “negative” outlook, which means a rating downgrade is possible. Given the three ratings applied to France, its debt remains very reliable in the eyes of the markets.

The slowdown in growth could have an adverse impact on budget revenues, and the debt burden in spending could increase with a further rate increase by the European Central Bank (ECB) at its October 26 meeting. The Ministry of the Economy is banking on economic growth of 1% this year, then 1.4% in 2024. Debt would remain stable at 109.7% of GDP in 2024, reaching 108.1% at the end of five year term.