Pakistan

Weaker Outlook: Fitch downgrades France’s credit rating

The AA grade–two steps below the top triple-A rating–was decided despite France having reduced its projected deficit

Afp December 13, 2014

WASHINGTON: Ratings agency Fitch cut France’s credit grade by one notch to “AA” on Friday, saying Paris’s efforts to trim its fiscal deficit have fallen short to avoid a downgrade.

“The weak outlook for the French economy impairs the prospects for fiscal consolidation and stabilising the public debt ratio,” Fitch said.

The AA grade–two steps below the top triple-A rating–was decided despite France having reduced its projected deficit for fiscal 2015 to 4.1% of GDP, down from 4.3%, under pressure from the European Commission.

“On its own, this will not be sufficient to significantly change Fitch’s projections of France’s government debt dynamics,” the agency said.

“The 2015 budget involves a significant slippage against prior budget deficit targets.” It noted that the draft 2015 budget projected government debt to GDP ratio will peak at 98% in 2016, higher and later than previous projections.

Published in The Express Tribune, December 14^th, 2014.

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