Fitch Ratings has affirmed France at ‘AA’ but cites (amongst other factors) the substantial worsening in public finances and economic activity expected this year due to the COVID-19 pandemic for its lowering of the outlook to negative.
- The combination of much reduced economic activity due to containment measures introduced from March and government policies to support the economy in the period of enforced reduced activity will sharply increase government borrowing and indebtedness. This deterioration of France’s public finance metrics will happen in the context of already high debt levels in comparison with rating peers, limited progress in fiscal consolidation since the global financial crisis, and moderate real economic growth.
That’s a summary, the report also notes:
- France’s ratings are underpinned by a large, wealthy and diversified economy, strong and effective civil and social institutions and a track record of macro-financial stability. Public finances, and particularly the high level of government debt, remain a rating weakness relative to the ‘AA’ category.
More at that link above