S&P Global lowers France's ratings to 'A+/A-1'; Outlook stable

While the 2025 general government budget deficit target of 5.4 per cent of gross domestic product (GDP) will be met, S&P Global believes in the absence of significant additional budget deficit-reducing measures, the budgetary consolidation over its forecast horizon will be slower than previously expected.

It expects gross general government debt to reach 121 per cent of GDP in 2028, compared with 112 per cent of GDP at the end of last year.

Therefore, it lowered its unsolicited sovereign ratings on France to 'A+/A-1' from 'AA-/A-1+'. The outlook remains stable.

The stable outlook on France balances rising government debt and weak political consensus on the pace of budgetary consolidation against the country's credit strengths, including its wealthy and balanced economy, high private savings, large and liquid financial sector, and euro area membership, the company observed in a release.

It could lower its ratings on France if the country’s budgetary position deteriorates beyond the company’s forecast or economic growth prospects worsen significantly.

It could raise the ratings if France's budget deficit narrows much faster than projected and economic growth accelerates, supporting a fall in the net general government debt-to-GDP ratio.

ALCHEMPro News Desk (DS)