Standard and Poor’s downgraded France’s sovereign rating on Friday May 31. From AA, it goes to AA-. This decision notably sanctions France’s public deficit, “ significantly higher than […] foreseen », Specifies the rating agency. A slippage in 2023 brought the public deficit to 5.5% of GDP, well beyond the 3% authorized in the euro zone, and the 4.9% planned. If the inherent risk of downgrading a rating could be a movement of distrust among investors and an increase in the debt burden, analysts are however not alarmist.
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If Standard & Poor’s believes that the France will not fall below the 3% public deficit mark by 2027, analysts want to be reassuring. “ The impacts of this downgrading of France’s credit rating will be very limited », explains Éric Dor, director of economic studies at the Institute of Scientific Economics and Management (Iéseg).
The markets have already taken into account the possible deterioration of this rating for a long time by adjusting their yield rates. As proof, according to economist Éric Dor, after the announcement of the slippage in the public deficit by Bercy at the start of the year, the markets then remained calm. For example, the interest rate gap between France andGermany, one of the highest-scoring countries, remained the same. There should therefore be no explosion in borrowing rates. And “ there should be no big surprises in the markets Monday morning », deciphers Éric Dor.
“ A high quality signature »
As for a potential flight of investors, economists point out that the debt stocks of highly rated countries are limited. France should therefore continue to find its place in these markets. Because its public debt would still remain attractive. This is also the opinion of Bruno Le Maire who believes that “ France maintains a high quality signature “.
Read alsoFrance’s sovereign rating lowered by S&P rating agency
Other positive points which work in favor of French debt, according to analysts: the diversification of France’s production, the importance of savings which can be taxed, or even the solidity of its banks.
The third most indebted eurozone country
France is now the third most indebted country in the euro zone, behind Greece and theItaly. The year 2023 was marked by the spiraling of France’s public deficit which reached 5.5% of GDP, well above the sacrosanct 3% mark. A rule set during the creation of the common currency in the stability pact. “ The countries “virtuous” fear that countries which over-indebted themselves, such as France and Italy, will end up creating a depreciation of the common currency which is the euro », analyzes Éric Dor. “ It is expected that, in the coming months, France will be the subject of an excessive deficit procedure by the European Commission in application of the legal texts of the stability pact », concludes the economist.