Standard and Poor’s maintains AA rating of France – Le Point

The US rating agency Standard and Poor’s maintained Friday AA debt rating long term in France while continuing to consider the fall. “The rating of France remains to AA because there are in our confirmation of the economic recovery and an improvement in the fiscal path,” he told AFP Marie-France Raynaud, Senior Analyst of Standard Poor’s years in France . Standard and Poor’s launched on October 10 a warning to France by suggesting that its long-term credit rating could fall if it does not undertake vigorous reforms or was caught in the trap of deflation. If the agency had then chosen to maintain the rating to “AA”, the third best, she had changed the outlook which is attached, passing it “negative” against “stable”. “The negative outlook means that we could lower the long-term rating this year or next year if France deviates from the fiscal path we currently anticipate”, reiterated the agency in a statement Friday.

Mrs Raynaud justified maintaining the AA rating by three main reasons. The first: “a more favorable economic environment with the sharp depreciation of the euro, the sharp fall in oil and low interest rates.” The agency also provides “a delayed impact of the reforms on private investment.” “We expect a real start of private investment from 2016,” she says. Finally “on the budget, the economic environment supports the improvement of the trajectory” of reducing the public deficit. According to Standard and Poor’s, the deficit, which is the sum of those of the State Social Protection and local authorities “may” from 4% of gross domestic product in 2014 to less than 3% in 2018. ” But the prospect initially remains negative because the weight of gross debt continues to increase, “adds Raynaud who feels the burden to” nearly 99% of GDP by 2018 against 68% of GDP in 2008 “.

The agency continues to consider reducing also notes “because the weight of public expenditure in GDP remains high” and, according to the analyst, representing nearly 55% of GDP in 2018 Ten years after the crisis, against 53% in 2008. It considers the rate to “a little over 57% of GDP” for this year. “We therefore consider that the fiscal space is limited government and fiscal trajectory is subject to three risks,” concluded the analyst from Standard and Poor’s citing “a turnaround in the global economy”, “impact of reforms more limited than expected “and” persistent deflationary pressures. “