The ax fell. On Friday April 28, the rating agency Fitch lowered France's rating for its debt and deficit. The agency evokes lower than expected growth prospects. "Political stalemate and (sometimes violent) social unrest pose a risk to Emmanuel Macron's reform agenda and could create pressure for more expansionary fiscal policy or a reversal of previous reforms," writes the rating agency in a press release.
The government had recourse to article 49-3 to have the pension reform adopted, dispensing with a vote in Parliament, which led to a marked hardening of social protest.
"This decision has given rise to demonstrations and strikes across the country and will likely strengthen radical and anti-establishment forces", also writes the rating agency which has so far rated France "AA" with a negative outlook. , or the risk of a lowering. The new rating is therefore "AA-", with a stable outlook now. Fitch is the first of the three main rating agencies to downgrade the French rating since the adoption of the pension reform.
The Minister of Economy and Finance Bruno Le Maire regretted in a press release the "pessimistic assessment" of Fitch believing that the rating agency "underestimates the consequences of the reforms" in particular those of pensions.
In its conclusions, Fitch refers to "significant budget deficits and modest progress" in reducing them. After reaching 4.7% in 2022, the French public deficit should rise slightly this year to 4.9% before gradually declining from 2024, anticipates the government in its stability program published in recent days, which is counting on a back in the European budgetary nails in 2027. Fitch anticipates for its part a 5% deficit this year.
Debt reduction should see a boost according to the government, with a debt representing 108.3% of GDP in 2027, i.e. 4 points less than previously envisaged but still very far from the European objective of 60%. It was at 111.6% of GDP at the end of 2022.
