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(Reuters) – Fitch Ratings on Friday confirmed France's sovereign rating "AA" and the stable outlook badociated with it, but notes that public finances, although their situation is improving little by little, remain a key point. However, the rating agency notes that the rating is based on a sound, healthy and diversified economy, on institutions that have proven successful, and on macroeconomic stability. which has also been tested.
France also enjoys very favorable financing conditions in the euro area and has access to very liquid and highly active capital markets, as one of the major economic powers of the euro zone. [19659002] But the public debt remains very high, 97% of GDP at the end of 2017, while the median in category "AA" is 38%, observes Fitch, and its reduction will take time, especially because of the transfer of the debt of SNCF, which would reach 35 billion euros (1.6% of GDP) by 2022.
Given the badumptions made by Fitch, this public debt will remain higher than 90% of GDP in the next decade. This is why the risks badociated with it will remain permanent for an extended period.
The agency thinks that the trend of declining unemployment will continue, despite a one-off standstill observed in the first quarter with an unemployment rate 8.9%, and the latter will fall to 8% by 2020.
"However, this unemployment rate remains even higher than the median of 5.2% and 5.5% for (grade grades) 'AA' and 'AAA' respectively" , Fitch writes.
The agency finally sees growth gradually slow to 1.8% in 2019 and 1.6% in 2020 after 2.0% in 2018.
If the ambitious program of structural reforms President Emmanuel Macron can significantly increase the growth potential, quantifying its impact, in the early stages of its implementation, however remains very uncertain, continues Fitch.
"The prudent management of the debt by France allows to mitigate the risk of a high public debt ", concludes Fitch, who also observes that current deficits in France are moderate.
France is also rated "AA" with a stable outlook by Standard & Poor's.
Moody's rating France "Aa2", a rank equivalent to "AA" but raised its perspective to "positive" early May [19659013] (Wilfrid Exbrayat for the French Service)
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