Fitch Ratings confirmed Friday AA sovereign rating of France and the stable outlook attached to it, referring to one side “a rich and diversified economy” and a “history on macro-financial stability” and the other, “a debt ratio to GDP ratio and a high budget deficit.”
The rating agency says in its statement that “the high level of debt limits the ability of France to face fiscal shocks “adding that it” represents the main weakness tied to the sovereign rating “of the country.
After getting the European Union two years longer, until the end of 2017 to bring its deficit below the limit authorized 3% of gross domestic product (GDP), the French government introduced in April a new trajectory of public finances.
This provides a public deficit reduced to 3.8% GDP this year and 3.3% in 2016 and 2.7% in 2017, with a public debt would peak at 97.0% of the national wealth next year before declining slightly to 96.9% in 2017.
These forecasts are based on an economic growth scenario of 1.0% this year and 1.5% the following two years. International organizations and the Bank of France expect between 1.1% and 1.2% this year, 1.3% and 1.5% in 2016.
Fitch expects for its part a reduced budget deficit to 3.4% of GDP next year and a ratio of 2.8% in 2017, debt is seen to peak close to 97% in 2017.
Fitch had lowered rating France in December 2014 from AA + to AA, with a stable outlook, saying the weak economy put at risk the deficit reduction targets.
The other two major rating agencies, Standard & amp; Poor’s and Moody’s respectively note the France AA with a negative outlook and Aa2 with a stable outlook, the first having confirmed earlier in the day his note and perspective.
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