French Economy Minister Bruno Le Maire vowed to pursue France’s “credible” public debt strategy after rating agency Standard & Poor’s decided to maintain France’s credit rating.
“It’s a positive signal,” Le Maire said in an interview with French weekly Le Journal du Dimanche published late Friday. “Our public finance strategy is clear. It’s ambitious. And it’s credible.”
The French government’s aim, Le Maire said, is to “accelerate France’s debt reduction to reach 108 percent of GDP by 2027, and reduce the public deficit to below 3 percent by 2027.”
S&P on Friday maintained France’s credit rating at AA, but said the outlook remained “negative” for its public finances due to the country’s “already elevated general government debt.”
In spite of recent positive reforms, like the contentious pensions reforms which increased the retirement age from 62 to 64, “French general government debt will remain elevated at more than 110 percent of GDP in 2026, with budget deficits narrowing only gradually,” S&P said.
In April, Fitch Ratings downgraded France’s rating from AA to AA-. “Social and political pressures illustrated by the protests against the pension reform will complicate fiscal consolidation,” Fitch argued.
Faced with increasing speculation that S&P would follow suit, France’s government ministers, including Le Maire and Prime Minister Elisabeth Borne, were actively campaigning this week, reaffirming the administration’s commitment to structural reforms in an effort to prevent another downgrade.
France’s public debt stands at an estimated 111.4 percent of gross domestic product for 2023, according to the IMF; while the government’s budget deficit reached 4.7 percent of GDP in 2022, according to S&P.
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