Moody’s revises France’s rating outlook downward
25 October 19:12
The international rating agency Moody’s has left France’s long-term rating at Aa3 unchanged, revising its outlook from “stable” to “negative”.
This was reported by Bloomberg, "Komersant Ukrainian" reports.
“Political instability could limit the government’s ability to address key policy challenges, such as a rising fiscal deficit, rising debt burden and continued rising borrowing costs, leading to a faster deterioration in France’s key fiscal indicators than we currently expect,” the report said.
According to the agency, political fragmentation in France increases the risk of reversal of previously implemented structural reforms, including the 2023 pension reform. Moody’s emphasizes that the prolonged suspension of reforms exacerbates the government’s fiscal difficulties and negatively affects economic growth.
This year, the budget deficit is 5.4% of GDP, which has reduced creditor confidence in France. In September, Fitch Ratings downgraded the country’s long-term foreign currency default rating from AA to A with a stable outlook, which was the worst in French history. Currently, the country’s public debt exceeds €3.4 trillion and continues to grow.
