It was a date set for a long time, but which falls in the middle of the examination of the 2025 budget in the French Parliament, where the government only has a very relative majority. The rating agency Moody’s updated France’s debt rating this Friday evening. It was double Aa2, the equivalent of an 18 out of 20. This rating does not change for the moment, but it comes with a negative outlook.
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This is therefore a warning: the rating agency could well downgrade France’s rating by one notch next time. Because many signals are red: starting with the public deficit, which has been slipping for almost a year, at 6% today, while the European Union sets a threshold of 3% as a rule.
This decision “ reflects the growing risk that the French government is unlikely to implement measures that would prevent larger-than-expected budget deficits », Underlined Moody’s in its press release.
The two other major rating agencies (S&P and Fitch) already give France a lower rating, the equivalent of 17 out of 20.
Also readThe Fitch agency maintains France’s rating at AA-, now placed under negative outlook
The maintenance of its rating by Moody’s is therefore rather surprising for Eric Dor, director of economic studies at the IESEG School of Management.
It’s a surprise indeed, because they maintain a gap that is quite difficult to justify compared to the other two large agencies. And what’s more, it contrasts a bit with the diagnosis they made at the start by saying themselves: “we don’t believe in the objective that the government sets for itself”.
Eric Dor: “It’s a surprise indeed…”
Objective of reducing the public deficit to 5% in 2025 then to 3% by 2029. The International Monetary Fund itself recalled this week that it does not believe in this either.
Moody’s estimates that it could downgrade France’s rating, for example, if the pension reform adopted last year was repealed by Parliament.
The French Minister of the Economy assured this evening that he had taken note of Moody’s decision and considered that France had ” real economic forces » and that she is “ capable of carrying out major reforms », In a reaction sent to AFP. “ Some (reforms) have already produced convincing results in terms of employment or economic attractiveness for our country. It is with this same energy that the government will act to restore our public finances. », assured the minister.
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