Standard & Poor's (S&P) on Friday cut its long-term sovereign credit ratings on France to "AA-" from "AA" over the increasing budget deficit, making it the second of the three major world rating agencies to do so, Report informs via Xinhua.
"The downgrade reflects our projection that, contrary to our previous expectations, France's general government debt as a share of GDP will increase as a result of larger-than-expected budget deficits over 2023-2027," S&P said in a statement.
"The stable outlook on France reflects our expectations that real economic growth will accelerate and support the government's budgetary consolidation, albeit not enough to bring down its already elevated general government debt-to-GDP ratio," it said.
The American credit rating agency projected that general government debt will reach 112.1 percent of GDP in 2027, up from 109.0 percent in 2023, adding that France's general government debt-to-GDP ratio has become the third highest in the euro area after Greece and Italy.
Noting that France had a higher-than-planned budget deficit in 2023, reaching 5.5 percent of GDP, S&P said that France's track record of budgetary consolidation over the past decades has been weak as it has not reported a primary budget surplus since 2001.