(WS News) – Rating agency S&P upheld its “AA-/A-1+” credit rating for France on Friday, maintaining a stable outlook despite the country’s mounting debt and political instability. While the agency acknowledged delays in fiscal reforms, it expressed confidence in France’s ability to consolidate its public finances.
Ratings agency S&P on Friday maintained its grade for the French economy saying the outlook was “stable” despite the European country’s debt mountain and political troubles.
S&P said it was keeping an “AA-/A-1+” rating for France’s credit ratings. “The outlook remains stable,” it said in a statement.
“Despite ongoing political uncertainty, we expect France to comply — with a delay — with the EU fiscal framework and to gradually consolidate public finances over the medium term,” the US ratings agency said.
“The stable outlook on France reflects balanced risks and strengths,” said S&P.
“Rising political fragmentation is complicating fiscal governance — most notably by delaying the approval of a credible 2025 budget.
Nevertheless, our base-case expectation is that French authorities will move ahead with budgetary consolidation,” it said.
Prime Minister Michel Barnier, who heads a minority government, on Thursday, announced a major concession in a bid to end a standoff with the opposition over the budget, which has caused jitters in financial markets and risks bringing down his government.
In a U-turn, Barnier said a previously planned increase in an electricity tax would no longer be included in the budget.
Barnier still faces pressure from the far-right National Rally and a left-wing alliance over the budget.
