Fitch retained France’s A+ sovereign rating but changed the outlook to negative on October 30. The assessment by Fitch cited weaker growth, fiscal deterioration and higher borrowing yields. The decision followed its August review, when the outlook remained stable, while the government reiterated its aim to bring the budget deficit down to 5 per cent. The ten-year government bond yield closed Friday at 4.97 per cent.
Credit-rating agency Fitch Ratings kept France’s sovereign debt at A+ on October 30 but moved the outlook from stable to negative. At its preceding review in late August, both the rating and outlook had remained unchanged. The new decision cited deterioration in the budget position and borrowing conditions.[1], [2]
France’s ten-year government bond yield finished Friday at 4.97 per cent, against 4.91 per cent on Thursday, after exceeding 5 per cent the previous week. Fitch said yields had risen more sharply than for most peers since its last review. It linked weaker growth, further fiscal deterioration and higher yields to greater difficulty sustaining budget consolidation.[1]
Economy Minister Roland Lescure called for a responsible budget before year-end, reiterating the goal of reducing the deficit to 5 per cent. French output contracted 0.1 per cent in the third quarter after a flat second quarter and a first-quarter decline. Fitch said economic size, wealth and diversification, strong institutions, euro-area membership and a resilient banking sector continued to support the retained rating.[1]
