Fitch lowers rating of France to “AA”, stable outlook – Echoes (Blog)

(Updated with reaction Michel Sapin, context)

PARIS, Dec. 12 (Reuters) – Fitch Ratings on Friday lowered sovereign rating of France by one notch to “AA” against “AA + “before the rating agency felt that the weak economy of the country was jeopardizing the deficit reduction goals.

The perspective attached to this note is stable.

In a statement, Michel Sapin, Minister of Finance, said “take note” of the decision of Fitch, while reaffirming “the quality of the signature of the French state.”

“The French debt among the safest and most liquid in the world, with a load of debt contained, as Fitch points out in its assessment. It has a strong and diversified investor base. This investor confidence feeds on a strategy coherent economic, the government intends to continue with determination, “he added.

Fitch said in a statement that the weakness of the French economy threatens the prospects of both fiscal consolidation and stabilization of the public debt ratio.

Thursday, Paris has yet announced a downward revision of its forecast deficit, saying now anticipate a total representing 4.1% of gross domestic product (GDP ) end of 2015, 3.6% and 2.7% end of 2016 end of 2017.

The government previously provided to reduce the deficit to 4.3% of GDP in late 2015, after 4.4% in late 2014 and 3.8% at end 2016 and 2.8% end of 2017.

GROWTH BELOW AVERAGE OF THE EURO AREA

According to Fitch, growth of the country this year should be less than the average for the euro area and for the first time in four years.

“The pursuit of a period of poor economic performance, which began in 2012, increases the uncertainty about growth prospects in the medium term, “says the rating agency

Earlier this month, Standard & amp.; Poor’s lowered its economic growth forecast for France to 0.4% this year, 0.7% in 2015 and 1.2% in 2016, while the government forecasts growth of 0.4% this year to 1.0% next year and 1.7% in 2016.

The International Monetary Fund (IMF) on its side early October revised down its growth forecast for France 0 4% this year and 1.0% next year.

The rating agency placed the long-term rating “AA +” of France “rating watch negative” 14 October.

In a statement released Friday morning, economists generally believed that the Company’s market impact of a potential deterioration “should be limited.”

The agency Moody’s maintained for its September 19 the negative outlook on the rating “Aa1″ it gives to France, the second best.

Standard and Poor’s for its part, dropped the note France a first time in January 2012 and again in November 2013, to “AA”. The agency revised the outlook to negative from stable on 10 October.

The sovereign ratings in the euro area (Jean-Baptiste Vey and Benoit Van Overstraeten, edited by Pierre Serisier)