The rating agency Fitch Ratings on Friday maintained France's long-term debt rating at “AA”, again with a “negative” outlook, citing the uncertainty surrounding the country's economic trajectory after the presidential election of April 2022.
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Fitch praised France's
“vast, rich and diversified economy”
, as well as its
“strong and efficient institutions and (its) history in terms of macro-financial stability”
.
“The French economy has shown signs of resilience to the shock of the coronavirus,”
the agency said in a press release, noting however that
“
the high level of public debt
”
constitutes a weak point for the rating.
The rating given to France is the third best on the Fitch rating scale, which has 22 steps.
It corresponds to a high quality transmitter.
The outlook remains negative.
This signals that the rating could be downgraded.
“The negative outlook reflects the uncertainty surrounding the trajectory of public debt and the direction of economic policy beyond the cycle of presidential and legislative elections in the spring of 2022,”
says Fitch.
The rating agency expects, however, that there will be
"no significant upheaval in the framework of the economic policy of France."
Higher public debt
She also notes that
"the shock of the Covid-19 pandemic has resulted in a much higher public debt than in previous years, and the risk that it will continue to increase in the long term (...) in a context of already high debt levels (...) and limited progress in fiscal consolidation in recent years ”
.
Fitch expects, for France, a growth of the gross domestic product (GDP) of 6.1% in 2021, before a slowdown to 3.8% in 2022, and to 2.2% in 2023.
In May 2020, Fitch lowered
the outlook for France's long-term debt rating
from
“stable”
to
“negative”
, fearing a deterioration in public finances and the economy in the face of the health crisis.
France's rating influences the terms under which the country can borrow money on the financial markets.
In April, another rating agency, Standard and Poor's, had maintained its rating of France's long-term debt at "AA", as well as the "stable" outlook attached to it, confident in its ability to reconnect with France. growth and restore the balance of its public finances.
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