The S&P rating agency announced this Friday, February 28, that it has left France’s debt note unchanged but by assorting it from a negative perspective, which means that a degradation is now possible.
The note remains AA- which corresponds to a “high” credit quality, while the perspective goes from “stable” to “negative”, S&P evoking public finances “under pressure” and “political support for limited reforms” despite the adoption of the 2025 budget.
The agency underlines “unequal political support for budgetary consolidation”, and the “temporary” nature of measures to reduce the deficit. “The budget strategy beyond 2025 remains uncertain”, also comments S&P, which “provides that GDP growth will fall below 1% this year”.
“The scale of the challenge”
The Ministry of the Economy “takes note of the decision of the S&P agency to maintain the French notation in Aa−, testifying to a very high quality signature,” he commented Friday evening with AFP.
“His placement in a negative perspective recalls the extent of the recovery challenge for our public finances, a challenge that the government is determined to take up,” said Bercy. The ministry considers that “the finance law for 2025 testifies to a historic turn towards the absorption of our deficits” and ensures that it has “implemented the control and management measures necessary to ensure the execution of the 2025 budget and control the debt of our country.
Eric Dor, director of economic studies at the Ieseg School of Management, had estimated upstream that “lowering the perspective to negative, that would be justified”. The economist observes that, despite the adoption of the budget, there has hardly had any progress in the management of French public finances since the last rating of S&P, November 29.
The note of the French debt is classified by the Moody’s AA3 agency with stable perspective, and Fitch the note also, with a negative perspective.