Fitch reaffirms France triple-A rating
Paris, December 15, 2012
Fitch Ratings stuck by its triple-A rating on France in a much-awaited review yesterday but predicted a peak in debt in 2014 at a level that it said was the maximum for a country with a top-notch credit grade.
Fitch is the only agency to retain an AAA rating on the euro zone's second-largest economy. It kept to its negative outlook, saying that indicated a slightly greater than 50 per cent chance of a downgrade in future.
The ratings agency forecast growth of only 0.3 per cent in 2013, well below the 0.8 per cent the 2013 budget is built on, and believes the government will not be able to narrow the public deficit as by much as it hopes.
Fitch managing director David Riley said the deficit was likely to come in at 3.6 per cent of national output, more than the 3 per cent targeted by President Francois Hollande's government.
"The combination of weaker growth and slightly larger deficits compared to the government forecasts mean that we expect government debt to peak at 94 per cent (of GDP) in 2014 and gradually decline thereafter," Riley said.
The French government forecasts debt peaking in 2013 at 91.3 per cent of GDP and dipping in 2014 to 90.5 per cent.
"The key fiscal trigger for a rating action is not the precise 'point' forecast but rather confidence that government debt to GDP ratio will indeed be on a firm downward path from 2014," he added.
Many economists expect growth to be far weaker and that it will be necessary to cut spending further or raise more tax income to meet deficit targets. Hollande said after an EU summit in Brussels that he saw an economic recovery emerging in 2013.-Reuters
More INTERNATIONAL NEWS Stories
- N Korea tanker ‘leaves Libya rebel port carrying oil’
- Malaysia missing plane not terror related: Interpol
- Crimea closes air space to commercial flights
- Missing Malaysian plane last seen At Malacca Strait
- Stolen passport holder on missing plane is Iranian
- China deploys 10 satellites to search for Malaysia jet
- Libya says halts tanker outside port; rebels deny it
- Libya orders military force to 'liberate' ports
- Big bananas: Chiquita, Fyffes merge
- Radar sweeps, dozens of aircraft, but no sign of plane
- N Korea tanker loads oil at Libya rebel port
- Gold drops as US growth optimism weighs
- Merkel raps Putin; Russia tightens grip on Crimea
- World 'at sea' over missing Malaysian jetliner
- Passports requiring probe were on Malaysia flight
- 40 killed in Yemen as Houthi fighters near capital
- Vietnam finds object in sea; search on
- $5bn poll spend to boost India economy
- Libya authorises use of force against Korean tanker
- Ukraine PM says he will go to US to discuss crisis
- Syrian journalist killed covering fighting
- Malaysian jet may have turned back before vanishing
- No sign of missing plane; Malaysia probes false passports
- Two Europeans not on board 'missing' Malaysian jet
- China draws red line on North Korea
- Saudi sentences three to death for 2003 bombing
- First bitcoin machine opens in UK
- US sanctions will boomerang, warns Russia
- China plans $50bn bank to fund projects
- Sony to sell Tokyo 'birthplace'