S&P maintains France economy rating and outlook

Ratings agency S&P maintained its grade for the French economy, saying on Friday, November 29, that the outlook was “stable” despite the European country’s mountain of debt and political troubles.

S&P said it was keeping a “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 on 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.