LONDON, United Kingdom. France’s credit rating has been downgraded by Moody’s.
The EU nation’s score was taken down a notch to “Aa2” – the third-highest rating which is offered by the agency.
According to Moody’s, sluggish growth in France’s economy is expected to continue for at least the next five years – affecting the government’s ability to reduce its debt burden.
However, France’s outlook was upgraded to “stable” from “negative”, with Moody’s insisting the country’s creditworthiness “remains extremely high” thanks to its high per-capita income and wealthy, well-diversified economy.
In a statement, the agency added: “The current economic recovery in France has already proven to be significantly slower – and Moody’s believes that it will remain so – compared with the recoveries observed over the past few decades.”
On Wednesday, the French government said it will stick to its current deficit and growth targets.
However, it has warned European Union partners that it may take longer for its levels of borrowing to fall within acceptable levels – shrouding President Francois Hollande’s reform drive in doubt.
Worryingly for Mr Hollande, Moody’s also expects that France will continue to be hampered with high rates of structural unemployment – an issue which has seen his approval ratings plummet in recent years.
Credit: Sky News
