Fitch keeps AAA rating for France

Source:Xinhua Published: 2012-12-14 20:27:55

The Fitch rating agency on Friday kept its triple-A rating for France, but with a negative outlook, indicating a more than 50 percent chance for a downgrade in the future.

Fitch is the only one of the three international rating agencies which still maintains France's AAA status. The Moody's and Standard and Poor's have both downgraded France's debt rating from AAA to Aa1 and AA+ respectively, both with negative outlooks.

Fitch forecast France's debt to GDP ratio to rise from 92 percent to 94 percent in 2014, adding that this was "at the limit of the level of indebtedness consistent with France retaining its 'AAA' status assuming the government debt is firmly placed on a sustainable downward path from 2014."

French Finance Minister Pierre Moscovici welcomed Fitch's move as a signal of "the strength of French economy" and "encouragement" for the government's policy to reach balanced finances.

"It's a pointer for the way ahead. My take on this is that the French economy is solid and can be trusted, and it is absolutely essential that we keep to the path we have mapped out: European construction, budget solidity and competitiveness," the minister told Europe 1 radio.

He said Fitch's decision was "an encouragement for the present because the agency said that France is going in the right direction and we're doing the structural reforms that the country needs, particularly on competitiveness and on deficit reduction."

In the face of feeble economic activities and alarming record joblessness, the Socialist government is sticking to its 0.8-percent growth target next year. It also plans to trim the country's budget deficit by 1.5 percentage points to 3 percent in 2013 via deficit-cutting measures worth37 billion euros (48.39 billion US dollars) and a competitiveness pact.

Posted in: Economy

blog comments powered by Disqus