PARIS, June 1 (Xinhua) -- 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.
"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.
French Minister of Economy and Finance Bruno Le Maire reiterated that the French government will consolidate public finance.
"Our strategy remains the same: reindustrialize, achieve full employment and maintain our trajectory to return below the 3 percent deficit in 2027," he said in an interview with Le Parisien newspaper.
Fitch had already cut its rating on France to "AA-" in April 2023 while Moody's kept it at "Aa2." ■
