France’s credit outlook was downgraded by Moody’s, citing concerns over the country’s finances. The agency affirmed France’s credit rating at Aa2 but changed the outlook to “negative,” warning of potential credit rating cuts due to wider-than-expected deficits and debt affordability.
New Finance Minister Antoine Armand acknowledged the decision but vowed to carry out reforms and restore the country’s finances. However, Moody’s noted that political and institutional risks in France are hindering policy measures for improving the budget balance.
Prime Minister Michel Barnier aims to reduce the deficit to below 5% of GDP, though facing opposition in parliament. France’s debt is expected to reach 115% of GDP, well above the EU target of 60%. Fitch Ratings also revised France’s outlook to “negative,” highlighting fiscal policy risks.
Armand emphasized the need to monitor and adjust public spending for savings. Despite challenges, France’s economy remains supported by its large and diversified economy.
Source: Le Monde with AFP
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