The US rating agency Standard and Poor’s (SP) maintained Friday long-term debt rating to AA from France , while continuing to consider lowering it. “Despite the improved fiscal performance in 2015, we believe that the risks continue to weigh on the stabilization of the public debt, given the fragility of the recovery , the weak inflation and the prospect of further fiscal slippages, “the agency said in a statement.
“The outlook remains negative, reflecting the risks that continue to weigh on us as the trajectory of the public debt and the economic outlook,” she said, adding that a negative outlook indicates the probability that it lowers the long-term rating of the country this year “is at least one in three.”
The agency in the crosshairs of fiscal slippages
SP matches the long-term credit rating of AA France a negative outlook since October 2014 . it is likely to lower the rating if “the budget deficit did not shrink as we currently expect, either because of fiscal slippages in pre-election period, if the economic recovery is not confirmed as we expect” , she explains.
Another factor that could lead it to revise downward the rating of France: if “we perceived that the train of measures to support the competitiveness of the government was not enough to increase potential growth” , she adds. The agency traditionally tougher with regard to France as its counterparts Moody’s and Fitch, had been the first to deprive the country of its “triple A”, in January 2012.
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