The rating agency Moody's Investors Service downgraded France's government bond ratings by one notch from Aa1 to Aa2. The move was prompted by significant weakness in France’s medium-term growth outlook which apparently extends to the end of the decade, while the forecast for the ratings remains stable.
Moody's report says that because of a low GDP growth rate in France coupled with political and institutional constraints, the high debt burden is likely to remain up to the beginning of 2030.
France's current credit worthiness is extremely high. Experts say France is a well-diversified economy with a high per capita income and favorable demographic trends.
The latest rating reflects the French government’s efforts to stabilize its finances and intentions to increase the economy's competitiveness.
As it became known, the main reason for downgrading France's government bond ratings were the Moody's forecasts about low French economic growth on extremely low growth potential following the financial crisis of 2008.
According to the rating agency, France had to face global challenges, such as weak corporate profit margins, very high levels of state expenditure, constant budget deficit for the last 40 years, and high unemployment rate.
