PARIS – Credit ratings agency Fitch revised France’s outlook to “negative” from “stable” on Friday, citing increases in fiscal policy and political risks.
“This year’s projected fiscal slippage places France in a worse fiscal starting position, and we now expect wider fiscal deficits, leading to a steep rise in government debt towards 118.5% of GDP by 2028,” Fitch said in a statement, while maintaining France’s rating at “AA-.”.
While the French government aims to reduce the public deficit to 5% of GDP by 2025 and below 3% by 2029, Fitch remains sceptical, arguing they “do not expect the government to meet its revised medium-term deficit targets.”
“A high degree of political fragmentation and a minority government complicate France’s ability to implement sustainable fiscal consolidation policies,” the rating agency added.
France’s public finances have sharply deteriorated this year as tax income fell short of expectations and spending exceeded them, leaving French debt at risk of a ratings downgrade.
