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S&P maintains France's rating, confident in its rebound capabilities

2021-04-02T21:58:33.415Z


If S&P forecasts a rebound of 5.6% of GDP, it underlines "a large budget deficit and a sharp increase in public debt".


Standard and Poor's on Friday maintained France's long-term debt rating at "AA" as well as the

"stable"

outlook

attached to it, confident in its ability to resume growth and restore balance to its finances public.

Read also: Why the rating agencies have lost so much of their influence

The rating agency had kept the country's sovereign rating unchanged during its previous review in October.

S&P, which forecasts a rebound of 5.6% of GDP, admits that

"the broad measures to support the economy have resulted in a large budget deficit and a sharp increase in public debt

.

"

The crisis caused the debt to soar to 115.7% of GDP in 2020, while the public deficit reached 9.2% of GDP, the state having spent lavishly to support the economy in the face of health restrictions.

But

"we believe that the diversified economy of France, its solid institutions and the counter-cyclical economic policy opportunely followed, associated with the monetary support of the European Central Bank (ECB), reinforce the prospects for recovery and a gradual return to the economy. 'balance of public finances'

.

The stable outlook

“reflects our opinion that France will contain the negative effects of the pandemic on its economy and its budgetary situation

,

adds the agency.

Risk of downgrading the rating

S&P warns, however, that the rating could be revised down

"if the budget deficit does not reduce as we expect"

, or because of

"insufficient effort to restore the fiscal path once the effect of the pandemic will have abated ”

, ie if the economic recovery was slow to materialize.

In May 2020, the competing agency Fitch had lowered the prospect of France, while keeping its AA rating.

Source: lefigaro

All news articles on 2021-04-02

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